IRS Extends Deadlines for Plan/IRA Amendments to Reflect CARES Act and Taxpayer Certainty and Disaster Tax Relief Act

[34300]

September 30, 2022

TO: ICI Members
Pension Committee
Pension Operations Advisory Committee SUBJECTS: Pension RE: IRS Extends Deadlines for Plan/IRA Amendments to Reflect CARES Act and Taxpayer Certainty and Disaster Tax Relief Act

 

IRS Notice 2022-45 (the Notice)[1] announces an extension of the deadlines for amending retirement plans and IRAs to reflect provisions of section 2202 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (providing special tax treatment with respect to coronavirus-related distributions and loans to qualified individuals),[2] and section 302 of Title III of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act) (providing special tax treatment with respect to distributions and loans from retirement plans for taxpayers affected by federally-declared disasters).[3] This relief follows a notice issued in August that provided the same extension with respect to other legislative provisions.[4] The IRS explains in the Notice that it anticipates that amendments to reflect the CARES Act and Relief Act as described in the Notice, as well as the amendments to reflect provisions described in Notice 2022-33, may be adopted on a single date.[5]

Prior to the extension, the amendment deadline for reflecting these changes for IRAs and private-sector plans was generally December 31, 2022 (or, the last day of the first plan year beginning on or after January 1, 2022).[6] For governmental plans, the deadline was generally the last day of the first plan year beginning on or after January 1, 2024.

Pursuant to the Notice, the extended amendment deadline for IRAs and non-governmental qualified retirement plans and section 403(b) plans (not maintained by a public school) is now December 31, 2025. For governmental plans (including 403(b) plans maintained by a public school), the extended deadline is generally 90 days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins after December 31, 2023.[7]

 

Shannon Salinas
Associate General Counsel - Retirement Policy
 

Notes

[1] Notice 2022-45 is available here https://www.irs.gov/pub/irs-drop/n-22-45.pdf.

[2] See ICI Memorandum No. 32556, dated June 26, 2020, available at https://www.ici.org/memo32556. Section 2202 of the CARES Act permitted certain qualified individuals affected by the COVID-19 emergency to take penalty-free withdrawals from defined contribution plans and IRAs (up to $100,000), allowed plans to temporarily increase limits on plan loans for qualified individuals, and delayed the due date for certain plan loan repayments.

[3] See ICI Memorandum No. 33027, dated January 7, 2021, available at https://www.ici.org/memo33027.

[4] For a summary of Notice 2022-33, see ICI Memorandum No. 34256, dated August 17, 2022, available at https://www.ici.org/memo34256. Notice 2022-33 extended the deadlines for amending retirement plans and IRAs to reflect provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), section 104 of the Bipartisan American Miners Act of 2019 (Miners Act) (lowering the age for in-service withdrawals from qualified pension plans and governmental 457(b) plans), and section 2203 of the CARES Act (waiving the required minimum distribution (RMD) requirements for defined contribution plans and IRAs for 2020).

[5] See footnote 1 of the Notice.

[6] Amendments to individually designed plans generally do not need to be adopted until a change in the law is published on the IRS Required Amendments List, but for calendar year pre-approved plans—which includes most plans—amendments would have been needed by the end of 2022.

[7] Specifically for governmental 457(b) plans, the deadline to amend is the later of (i) 90 days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins after December 31, 2023, or (ii) if applicable, the first day of the first plan year beginning more than 180 days after the date of notification by the Secretary that the plan was administered in a manner that is inconsistent with the requirements of section 457(b) of the Internal Revenue Code.