Surgent's COVID-19 IRA and Plan Provision Contributions, Distributions, and Loans (ACV9)

Description

This presentation explains some of the retirement account-related provisions that have been made for individuals adversely affected by COVID-19. This includes the technical, compliance, and operational requirements that apply.

The IRS recently issued Notice 2020-18: Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic. This Notice provides relief from tax deadlines to affected taxpayers who have been adversely affected by the COVID-19 emergency. The IRS defines affected taxpayers, for the purpose of this relief, as any person with a federal income tax payment or a federal income tax return due April 15, 2020.

Under this relief, the due date for filing federal income tax returns and making federal income tax payments, which was previously April 15, 2020, is automatically postponed to July 15, 2020. Affected taxpayers do not have to file Forms 4868 or 7004 (both applications for extensions to file applicable returns), as this is a postponement and not an extension.

In addition, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and includes provisions that are intended to provide relief for the economic downturn caused by the coronavirus disease 2019 (COVID-19).

Highlights

• Denise Appleby’s Reference Guide for IRA Transfer & Rollover Rules: For IRA Owners
• Rev. Proc. 2016-47: Waiver of 60-Day Rollover Requirement
• Notice 2020-18: Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic
• Filing and payment deadlines questions and answers (in response to questions received by the IRS about Notice 2020-18. The IRS indicated that this will be updated periodically)
• The CARES Act
• Waiver of RMD for 2020
• Waiver for certain 2019 RMDs not taken in 2019
• Rollovers of 2020 RMDs that are no longer RMDs
• One-year extension for beneficiaries subject to the five-year rule
• Coronavirus-related distributions: waivers and extended deadlines
• Increase in loan amounts
• IRA contribution deadline
• Deadline for paying the 10% early distribution penalty
• Deadline for making employer contributions
• Transactions for which no postponement relief is provided under Notice 2020-18

Objectives

• Advise clients on how the CARES Act affects them
• Determine IRA contribution deadlines and timing of RMDs
• Determine how COVID-19 IRA plan provisions affect RMDs

Designed For

Any tax professional advising clients regarding IRAs or qualified plans