IRS guidance on CARES Act qualified plan distributions and loans
Overview
The IRS recently issued Notice 2020-50, providing further guidance on Coronavirus Aid, Relief and Economic Security Act (CARES Act) provisions impacting tax-qualified plan distributions and loans. The CARES Act provided for certain penalty-free distributions from tax-qualified plans made on or after January 1, 2020 and before December 31, 2020. Income from such plan distributions may be taxed over three years or may be repaid within three years. The CARES Act also increased eligible plan loan amounts and provided for a suspension of certain loan repayments that are made to certain individuals.
Notice 2020-50 expands the group of individuals eligible for these types of distributions and loans and provides guidance to employers and participants on tax reporting. Separately, the IRS issued guidance in Notice 2020-51 on the waiver of 2020 minimum required distributions (RMDs) from certain retirement plans.
Contact us
Follow us
