COVID Hardship Distribution Relief: Three-Year Delayed Taxation, Repayments, Plan Loans, and Form 8915-E

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, January 14, 2021

Recorded event now available

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Program Materials

This webinar will explain the latest guidance on Section 2022 COVID relief for qualified retirement plans, including individual retirement accounts (IRAs), for tax professionals working with businesses and individuals participating in these plans. Our retirement expert will cover delaying taxation of certain distributions, repaying these same distributions, the relaxation of repayment terms for plan loans, and qualifying to avoid the premature distribution penalty.

Description

Section 2022 of the CARES Act provides relief for amounts withdrawn from IRAs and other qualified plans due to the current pandemic. This section allows a qualified individual to spread the taxation of amounts up to $100,000 and withdrawn between Jan. 1 to Dec. 30, 2020, over a three-year period. Recipients are allowed to repay amounts withdrawn and avoid taxation if reported and restored timely.

The IRS anticipates issuing guidance on this relief but suggests, in the meantime, taxpayers follow guidance issued under Notice 2005-92 for Katrina Emergency Tax Relief Act of 2005. Section 2022 provides additional relief by delaying repayment of plan loans and increasing the limits on plan loans. For taxpayers who are no longer receiving benefits from their employer or unemployment, the ability to defer taxation of these distributions is critical.

Tax professionals working with individuals who participate in qualified retirement plans need to understand this relief's nuances, including how to report the distribution and qualifications on Form 8915-E. Our experienced panelist will explain the latest guidance on COVID relief for hardship withdrawals, including which taxpayers are eligible for relief, how to handle deferral of taxation of these distributions, amending returns for repayments of amounts withdrawn, and properly reporting transactions on Form 8915-E.

Listen as our authoritative presenter, a retirement tax law specialist, explains the latest guidance on Section 2022 COVID relief for qualified retirement plans, including IRAs, for tax professionals working with businesses and individuals. He will cover delaying taxation of certain distributions, repaying these same distributions, repayment terms relaxation for plan loans, and avoiding the premature distribution penalty.

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Outline

  1. CARES Act: Section 2202 relief
  2. Qualified individuals
  3. Qualified distributions
  4. Taxation of distributions
  5. Repayment of distributions and amended returns
  6. Filing Form 8915-E
  7. Relief for plan loans

Benefits

The panel will review these and other key issues:

  • How is a qualified distribution reported on Form 8915-E?
  • How is the reporting of this distribution coordinated with other disaster relief?
  • What requirements must be met to qualify for the three-year spread of taxation of distributions?
  • How does the subsequent repayment of distributions impact the calculation of tax?
  • What relief is available for plan loans under 2022 of the CARES Act?

Faculty

Bridgers, Griffin
Griffin H. Bridgers

Attorney
Hutchins & Associates

Mr. Bridgers' practice encompasses all areas of private wealth and family business. In addition to estate...  |  Read More

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