Wednesday, July 1, 2020
CARES Act Update
IRS Provides Additional Guidance on CARES Act’s Impacts on Retirement Plans

The IRS has provided additional guidance regarding the coronavirus-related distributions, the modification to plan loans made to individuals impacted by COVID-19, and the 2020 waiver of the required minimum distributions. To see the original article we published related to these topics, click here . This article will provide an update to such article as provided in the recently released additional guidance from the IRS in Notices 2020-50 and 2020-51.

Coronavirus-Related Distributions

IRS Notice 2020-50 expanded the individuals who are allowed to use the coronavirus-related distribution and use the CARES Act loan modifications. Such individuals include the following:

  • individuals who have been diagnosed with SARS-CoV-2 or coronavirus disease 2019 (referred to as COVID-19) by a test approved by the Centers for Disease Control (including a test authorized under the Federal Food, Drug, and Cosmetic Act),

  • an individual whose spouse or dependent has been diagnosed with one of these viruses by the same approved test, or

  • an individual who experiences adverse financial consequences, due to COVID-19, as a result of

  • the individual, the individual’s spouse, or a member of the individual’s household (as defined below):

  • being quarantined, furloughed, laid off, or having reduced working hours,

  • having a reduction in pay (or self-employment income),

  • having a job offer rescinded or start date for a job delayed, or

  • being unable to work due to lack of child care;

  • the closing or reducing hours of a business owned or operated by the individual, the individual’s spouse, or a member of the individual’s household.

The Secretary of the Treasury may issue additional factors determined to allow an individual to take a coronavirus-related distribution.

A member of an individual’s household is someone who shares the individual’s principal residence. The plan administrator is allowed to rely on a certification provided by the individual that they meet one of the situations listed above. The plan administrator is not required to inquire about the financial hardship of an individual requesting a coronavirus-related distribution because the amount distributed does not have to be related to the amount of financial hardship the individual experiences due to COVID-19.

The ability to recontribute the coronavirus-related distribution over a 3-year period is only applicable if the coronavirus-related distribution was an eligible rollover distribution.

Employee Benefits Attorneys
Jeremiah D. Wood  practices in the firm’s Employee Benefits and Executive Compensation Practice Group. His practice includes experience in the design, implementation, administration and termination of tax-qualified retirement plans (including traditional pension plans, cash balance plans, profit sharing plans, 401(k) plans, and ESOPs), 403(b) plans, nonqualified deferred compensation plans (including 457(b) and 457(f) plans and deferral compensation arrangements for executives) and health and welfare plans. He works for a variety of clients, including Fortune 500 companies, local and regional financial institutions, privately held business organizations, professional corporations, governmental organizations and non-profit organizations.

Disclaimer:  The information included here is provided for general informational purposes only and should not be a substitute for legal advice nor is it intended to be a substitute for legal counsel. For more information or if you have further questions, please contact one of our Attorneys.

CARES Act Bankruptcy Update  (April 10, 2020)

Employee Benefits Practice Group
Our firm has the largest and most experienced employee benefits practice in Arkansas, encompassing more than 1,000 separate benefits and compensation plans. We handle every legal aspect of employee benefits plans, from design, implementation, and administration to compliance audits and mergers and acquisitions.

All members of our practice group have Master of Laws in Taxation degrees. More importantly, while other firms may address this area of the law with employment lawyers who are not trained in the complexities of tax law, you have the assurance of knowing that our group focuses exclusively on the tax and ERISA (Employee Retirement and Income Security Act) concerns of your unique benefits plan and compensation needs.
About the Firm

Friday, Eldredge & Clark, LLP is a full-service law firm representing businesses, non-profits, governmental and individual clients in Arkansas and across the United States. We are the largest law firm in Arkansas and one of the oldest — tracing our historical roots back almost 150 years. Our success stems from strong internal leadership and a continuously sharp focus on our clients' needs. We provide clients single-source convenience by offering a wide range of services in more than 50 areas of law. Although the firm is known for its rich history and vast scope of services, it is committed to further growth and development to serve our clients better and put them at the focus of our work - every day.