Overview
Action Item
- Review our In-Depth: COVID-19 Related IRS Notices
Over the last several days, the Internal Revenue Service (IRS) has issued three Notices to provide additional guidance to sponsors of tax-qualified retirement plans as they implement provisions of the Coronavirus Aid, Recovery, and Economic Security Act (CARES Act) and take other steps in response to the COVID-19 (coronavirus) crisis.
For an overview of CARES Act provisions applicable to tax-qualified retirement plans, please view our Client Alert at comp_ca_covid19_retirement.
IRS Notice 2020-50
One of the ways in which the CARES Act attempts to relieve some of the financial burden of the COVID-19 crisis is by permitting plan sponsors to allow early access to plan funds through expanded plan loans and “coronavirus-related” hardship distributions.
To review the notice in more detail, visit: www.bfkn.com/covid-19-irs-notices.
IRS Notice 2020-51
Another way in which the CARES Act has attempted to alleviate some of the financial burdens associated with the COVID-19 crisis is by permitting the suspension of required minimum distributions (“RMDs”) in 2020. The general idea underlying this suspension is assets should not be forced out of plans at a time when they might have lost significant value due only to the impact of the COVID-19 crisis on plan investments.
To review the notice in more detail, visit: www.bfkn.com/covid-19-irs-notices.
IRS Notice 2020-52
A third Notice recently issued by the IRS, while not specifically relating to the CARES Act, is intended to provide plan sponsors with guidance about, and relief with respect to certain requirements applicable to, mid-year reductions or suspensions of “safe harbor” contributions.
To review the notice in more detail, visit: www.bfkn.com/covid-19-irs-notices.
We Can Help You
We have been on the forefront of dealing with COVID-19 for our clients. Please contact us if you would like to discuss safety protocols and strategies or other employment matters impacted by COVID-19, or if we can otherwise be of assistance in any way.
COVID-19 Resources
We recommend you evaluate the following pandemic-related business and legal considerations that we have been discussing with our clients: