IRS Notice 2020-50 and Technical Corrections to Facilitate COVID-19 Cash-Flow Relief for Savings and Plan Benefit Participants Who Wish to Make Benefit Withdrawals
61 TAX MGMT. MEMO. 183, 2020
8 Pages Posted: 29 Jun 2020
Date Written: July 6, 2020
IRS Notice 2020-50 clarified many issues with the respect to how the CARES Act allows participants and beneficiaries to access their own savings and retirement plan benefits to address their cash-flow problems without adversely affecting their benefits. However, the Notice also highlights the need for technical corrections to the CARES Act and more guidance, including some mentioned in an earlier article, so that millions of individuals may more readily withdraw such funds, repay any such withdrawals within three years of receiving those funds, know what is required to qualify for this and other Covid-19 cash-flow relief that is available, and know the effects on their future loan repayment requirements if they choose to delay some of their 2020 plan loan payments, which may result from a new 2020 loan, for one year pursuant to the CARES Act or until July 15, 2020 pursuant to IRS Notice 2020-23.
Keywords: COVID-19, coronavirus, pandemic, disaster, financial relief, financial crisis, saving plans, pension plans, retirement plans, income tax, Internal Revenue Code, withdrawal, repayment, distribution, plan loan, loan relief, employee, participant, rollover, repayment
JEL Classification: I18, J26, J32, K34, K39
Suggested Citation: Suggested Citation