RatherBeGolfing

No... The could adopt 3% SH mid year under SECURE. Too late for SH Match though

I haven't seen anything, but I would probably put Notice 2020-23

NO NO NO NO NO

Basically what he said was that you dont have to add a special provision to waive the 20% withholding, but you have to give a 3405(e)(10) notice that you can elect out of the 10% withholding. Thanks for pointing out the AF webcast. Im sticking to my guns and saying 20% until we get guidance that says otherwise.

I agree. The reasonable assumption seems to be that CARES distributions and repayments will be reported on Form 8915 like prior qualified disaster distributions and repayments. going by the Form 8915 instructions, the 2020 payment (repaid before the due date of the 2020 return) of $75,000 would first reduce the part of the distribution included in income for 2020. The excess would then carry forward to 2021, reducing the 2021 distribution included in income. The remaining excess of $8,334 carries forward to 2022, leaving $25,000 to be included in income for 2022. If we had paid 50,000 after the due date of the 2020 return, it would first reduce the part of the distribution to be included in income for 2021, and the excess could be carried back to 2020 (amended return for 2020), or carried forward to 2022. I don't see any reason for the IRS to reinvent distributions and repayments when all they need to do is modify the instructions to include CARES. From the 2019 Form 8915-B instructions:

I think they were always a better place to apply to be honest. We had a lot of clients get approved through community banks, and the stories I have heard from the big banks have been pretty bad. I think an issue that still remains that most lenders will process current clients first, so if you don't bank at ABC Bank, your chances of getting processed before funds run out are relatively small.

I haven't either, but I know a great ERISA attorney who has, and he didn't see a problem with the facts in my situation. I think the fact that all HCEs are owners make it an easier sell than retroactively reducing non-owner HCEs who presumably have no say in the reduction.

For a prior year?

That's how I see it. The participant could claim it as a CVD but the plan has no obligation to treat it that way. This is how I am treating it, but there is plenty of disagreement here. Some say the plan can, but is not required to, allow a participant to self certify even if the plan does not offer CRDs. Derrin had this in his Q&A earlier this month, and Im hoping he will clarify it during the webcast today. EDIT: Derrin reiterated this position during today's webcast. Link to webcast. They usually have the recording up within a day or two if you were unable to attend

I already have amortization schedules ready using the safe harbor in 2005-92. I know there are people here who vehemently disagree with the application of 2005-92 to CARES, but I think it is a common sense approach absent further guidance. If new guidance says we can delay payments longer, then I have the option of extending the delay or keeping my current January repayment start date.

Can't she do that either way since she terminated? or is there a wait? If former employers plan offers CRDs, the answer is yes. For tax purposes, the answer is yes, regardless of former employers CRD election.

Normally, they just say our system wont do it, get your TPA to give you a new amortization schedule

That is not what the statute says. The statute says that loan payments with due dates during a certain period shall be delayed for 1 year. Again, the statute doesn't say "you will have no payments for one year", it says "these payments are delayed for one year". Lets look at a loan that has a final payment due date on December 31, 2020. The first delayed loan payment is March 31. March 31-December 31 are suspended for 1 year. There is no regular payment to resume on January 1, so the re-amortized loan starts again on March 31, 2021. That is a delay of a year. See above. The recycled language in the statute makes it a matter of interpretation. Most interpretations are staying close to the safe harbor in 2005-92. I know people take issue with that because the suspension period was longer than a year then, and its shorter than a year now, but I see no harm in using the safe harbor until we have further guidance. The payments will resume well after we have guidance, so there is time to fix it. Notice 2005-92 also states that the plan can use a shorter period, so it would reason that you wouldnt have to change at all if you go with a more conservative approach.

We just had a similar discussion last week EDIT: I see you were talking about a prior year issue. I linked to a thread on prospective suspension for HCEs As for prior year, yes I believe it is doable under VCP, but unless you are talking about a decent amount of SH contributions you want to avoid, that may be cost prohibitive.

We are still working it out. Depending on the client, some are doing deferral plus vested balance in other sources, some are deferral only, some declined to offer CRDs completely.

I have spent way to much time on JHs CRD form and its issues. The dumbest part is that you only option is to specify dollar amount to withdraw from each source. There is no way to say 100% of available funds from a source. When the form first came out, you could elect 100% of deferrals, but had to specify exact dollar amount form other sources. After we complained, they removed the 100% for deferrals rather than add 100% for other sources. With the market going up and down, you have to guesstimate what the available balance will be for the next day in order to process. If its partially vested source, you have to give yourself enough of a cushion, or JH will distribute non-vested funds. When we brought it up again, JH recommended that we use 85-90% as the dollar value in order to make sure that there is enough assets to process the distribution. Whoever designed and re-designed that form should be tarred and feathered. / end rant.

Whether that will be possible in operation will depend on more than the trustee or plan admin though. If the client is with a major platform recordkeeper like JH, American Funds, Ascensus, etc, the recordkeeper will make that decision.

Agree with @Bird. If you had an loan provision and you decided to change to add a fee or change a fee, I'd lean more towards do the 30 days even if not practical. In this case, loans are available for 180 days and people need cash now. I would add it as of today no hesitation.

Kids and dogs make for an interesting work from home experinece as well...

Ft Williams just released optional language to their loan documents, and they are limiting suspension to payments due before December 31, 2020, noting that further guidance is needed from IRS/DOL. I ave not seen anything from other document providers yet.

Peter, I'm not comfortable advising my clients to do this either. At least not without some sort of guidance from the IRS. While it is the participants responsibility to pay taxes, it is the plans responsibility to withhold taxes. The proposed tax treatment is essentially asking a non adopting plan to somehow adopt just the tax portion of 2202(a). Let's look at it from a different angle. Do you agree that if you cannot amend for the tax treatment alone, this could create a plan defect? Further, if you cannot amend for tax treatment alone, could the trustee or plan admin be seen as making determination as to the participants eligibility for tax treatment under CARES?

Good catch. I bet that is it because I have seen both CCH and WK documents referring to 1/1

You are correct

I'm with you this far. Where I go a different way is at the 4/30/21 payment. I would re-amortize the remainder of the original balance plus accrued interest over the remaining original loan term plus the 9 month suspension period. Only 2 different payment amounts unless you count $0 as a payment amount.

That is how I interpret it. My understanding is that this is also how most of the policy folks at the recordkeepers are interpreting it. The safe harbor under 2005-92 2005-98 uses remaining period of the loan, plus suspension period. Absent IRS guidance on CARES, I think that is the logical interpretation considering previous guidance in 2005-98. 2005-92 2005-98 says that loan payments must resume at the end of the suspension period. If we apply that to CARES, regular loan payments must resume in January of 2021. The suspended payments won't be due until after the one year delay (Most likely no earlier than April), but the maximum period you are disregarding from the 5 year term is 9 months (Apr-Dec). It doesn't make sense to add 12 months to the term when you had 9 months of non-payment. A more extreme example would be taking a loan in December, start paying in January, re-amortizing in December, and get a full 6 year term to pay it off. I think it comes down to what @Bird mentioned above. If the IRS comes out with CARES guidance that says that since the suspension period is less than 12 months, you get to delay all payments up to March 26, 2021, then I agree you would add 12 months to the end of the original term. The guidance would need to be inconsistent with 2005-92 2005-98 in order to make it work. Im not so sure they will focus on suspending all payments for 12 months rather than suspending all payments on or before December 31 though. Either way I think it will be a hard stop at December 31 or March 26. So the only way you get a full 12 months added on is if you had an existing loan at enactment.