IRS Notice 2020-23 extends certain tax-related deadlines until July 15, 2020, including the deadline to file personal and corporate income tax returns and pay associated taxes.
In addition to tax filing deadlines, the relief under Notice 2020-23 also applies to certain “time-sensitive actions” listed in Rev. Proc. 2018-18. The table below discusses those time-sensitive actions that may be of interest to employers who sponsor employee benefit plans.
The deadline for any actions below with an original deadline or due date falling between April 1, 2020 and July 14, 2020 is extended until July 15, 2020:
Form 5500 Filing
Deadline for filing Form 5500 for employee benefit plans. (Generally, the deadline for filing Form 5500 is the due date for the plan sponsor’s tax return, including extensions. This relief will impact certain plans sponsored by employers with non-calendar year tax years where the plan sponsor’s extended tax return is due between April and July.)
Requirement that participant loans from a qualified plan be repaid within 5 years. (In other words, an extension of plan loan repayment terms will not cause the loan to be disqualified even if the repayment pushes the terms of the loan beyond 5 years. Note that under the CARES Act, additional plan loan relief may apply to participants impacted by the COVID-19 crisis.)
Cafeteria plan elections (must be made before start of plan year) and forfeitures (e.g., grace period for use of FSA amounts before they are forfeited).
Deadline for contributions to an IRA to be made attributable to the preceding tax year.
Required beginning date for required minimum distributions from a qualified plan or IRA.
ESOP Diversification Elections
Deadline for qualified ESOP participants to file a diversification election and for ESOPs to process a diversification election once received (ESOP has 90 days after receipt of election).
401(k) Elective Deferrals
Deadline to distribute excess deferrals after end of plan year.
60 day deadline (after receipt of distribution) to make a rollover contribution.
Deadline for plan contributions to be attributable to preceding plan year (must be made by due date for plan sponsor tax return, including extensions).
Deadline for starting ESOP distributions (1 year after end of plan year for distributions upon retirement, death, disability; 5 years after end of plan year for other distributions).
Deadline to elect withdrawal from automatic contribution arrangement (90 days after first contribution).
Qualified Replacement Property
Deadline for selling shareholder in a section 1042 ESOP transaction to purchase qualified replacement property.
Deadline for self-correction of operational failures.
If you need more information, please reach out to any of your contacts at Schneider Downs or contact Shad Fagerland ([email protected]) or Jason Lumpkin ([email protected]) directly.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.