On December 27, 2020, President Trump signed into law Congress’s spending bill, the Consolidated Appropriations Act (CAA), 2021, which included the Additional Coronavirus Response and Relief (ACRR) provisions that modified the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). The PPP, a loan program designed to provide a direct incentive to businesses to retain their employees, was enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. PPP borrowers are eligible for loan forgiveness if the funds are used for eligible payroll and non-payroll costs.
The Internal Revenue Service (IRS) recently released two notices that provide additional guidance for retirement plan administrators and qualified individuals about the special distribution, plan loan, and required minimum distribution (RMD) provisions under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
As cash flow and decreased revenue concerns rise, many employers are looking for ways to cut costs. This article generally identifies the circumstances that allow a safe harbor 401(k) plan sponsor to suspend safe harbor contributions and the related consequences of such suspensions.
On May 4, 2020, the Internal Revenue Service (IRS) issued informal guidance regarding the coronavirus-related distributions (CRD) and loan options provided for retirement plans and participants under Section 2202 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
On September 23, 2019, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) published final regulations that modify the hardship distribution rules for profit sharing, 401(k), 403(b), and eligible governmental 457(b) plans. The final hardship distribution regulations generally expand and streamline the use of hardship distributions for changes made in legislative acts spanning more than a decade: the Pension Protection Act of 2006, the Heroes Earnings Assistance and Relief Tax Act of 2008, the Tax Cuts and Jobs Act of 2017, and the Bipartisan Budget Act of 2018.