Tax Advantaged Accounts

The CARES Act includes a provision allowing an eligible individual to take a coronavirus-related distribution(s) from certain retirement plans (including IRAs) through December 30, 2020. In addition to favorable tax treatment on the distribution, the law allows amounts to be repaid to certain retirement plans within three years after having taken the distribution(s). This article has been updated as a result of the IRS’s release of Notice 2020-50 on June 19, 2020.

On March 27, 2020, the President signed the CARES Act. Since then, additional guidance provided by the IRS gives IRA owners and beneficiaries the opportunity to repay to an IRA amounts that under normal circumstances would have been an RMD for 2020, allowing these individuals to avoid paying tax on the distribution.

On Wednesday, May 20, 2020 the Internal Revenue Service (IRS) released Revenue Procedure 2020-32 announcing the cost-of-living adjustments (COLAs) applicable to Health Savings Accounts (HSAs) for 2021.

Initially posted on April 20, 2020 this article explains the postponement of Specified Time Sensitive Actions until July 15, 2020. Notice 2020-35, recently released by the IRS, further postpones the 2019 Forms 5498 reporting deadline. As a result, this article has been updated.