When the CARES Act was enacted in March, numerous questions poured in from our members, but answers to some of the questions required additional clarity from the IRS. We now have those answers and have updated our Administrative Q&As to reflect them.
Among other things, the Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted March 27, 2020, included provisions to ease retirement plan hardship and loan rules for individuals impacted by COVID-19, as well as provided relief from the required minimum distribution (RMD) rules.
As part of a series of recent webcasts, we received a large number of questions from our members regarding key operational and administrative aspects of these retirement-based provisions and we answered them based on our current understanding. Since that time, the IRS has issued specific guidance addressing many of the unresolved questions.
Our Administrative Q&As are updated to reflect all the guidance received since their original publication through July 1.
For example, the updated Q&As incorporate guidance that was provided in Notice 2020-50 that expanded the categories of individuals eligible for Coronavirus-related distribution (CRDs) and loans, addressed whether employers can choose to implement these CRDs and loan provisions, as well as addressed rollover, notice and withholding requirements, tax reporting and accepting recontributions of CRDs.
Among the items the American Retirement Association had fielded over the past several weeks were issues addressed in this notice, including sample language for the qualified individual certifications and the codes to use for Form 1099-R for Coronavirus-related distributions, along with safe harbor procedures for loan repayments.
The updated Q&As also reflect the guidance under Notice 2020-51, which extended the rollback period for required minimum distributions already taken in 2020 and provided plans with transition relief and sample amendments, as well as Notice 2020-52, which provided limited relief for safe harbor plans.
The Q&As are separated into several broad categories:
- General & Miscellaneous Questions
- COVID-19 Distributions
- COVID-19 Loans
- RMD Waivers
- Safe Harbor & SIMPLE Plans
- Government Plans
- Defined Benefit & Cash Balance Plans
You can find links to these here.
We hope that you find this information to be valuable, and appreciate your continued involvement and engagement as we work to provide additional support and relief for plan sponsors and impacted participants at this critical time
Remember that the ERISA Outline Book is an invaluable technical resource—you can find more information and practical answers there on both the SECURE and CARES Acts. Reserve your copy today here.
