March 25, 2020

IRS Guidance: Impact of Extended 2019 Filing Deadlines on Retirement and Health Savings Plan Issues

By Theodore Ginsburg, Principal, Tax & Business Services

Related Services Tax & Business, Tax Advisory Services, Coronavirus Resource Center

IRS Guidance: Impact of Extended 2019 Filing Deadlines on Retirement and Health Savings Plan Issues Tax & Business

On March 20, 2020, the Internal Revenue Service (IRS) issued Notice 2020-18 which extended the due date for filing and paying various federal income tax returns. The due dates for filing these types of returns impact the timing of contributions, deductions, distributions and excise tax payments for certain retirement and employee benefit programs. On March 24, 2020, the IRS issued additional guidance on the impact of IRS Notice 2020-18 on these issues. Following is a summary of that guidance.

  • The deadline is now extended until July 15, 2020, for 2019 contributions to Individual Retirement Accounts.
  • Payment of the 10% excise tax on a 2019 early distribution (Internal Revenue Code (IRC) Section 72(t)) is now extended until July 15, 2020.
  • Excess deferrals into a tax qualified retirement plan (such as an IRC Section 401(k) plan) must still be refunded by April 15, 2020.
  • Employers with a federal tax return due date of April 15, 2020, have until July 15, 2020 to fund their retirement programs and receive a deduction under IRC Section 404(a)(6).
  • Contributions to Health Savings Accounts and Archer Medical Savings Accounts can be made until July 15, 2020, and may be deductible (within dollar limitations) on 2019 federal income tax returns.
  • Tax-qualified retirement programs and welfare benefit programs that file IRS Form 5500 are not eligible for an extension of time to file as a result of IRS Notice 2020-18.

The guidance can be found on www.irs.gov. The IRS indicates that the document is not citable as legal authority and that additional guidance may be forthcoming.

Marcum’s compensation and benefits advisors will provide you with more detailed information relating retirement plan and welfare plan issues as it becomes available. For more information, please contact Theodore Ginsburg, Principal, Tax & Business Services, at 440.459.5797 or email Ted.

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