Eligible Loan Rollover - new guidance

[52626]

Section 13613 of the TCJA amended § 402(c)(3) of the Code to provide an extended rollover deadline for qualified plan loan offset amounts (as defined in § 402(c)(3)(C)(ii)). Any portion of a qualified plan loan offset amount (up to the entire qualified plan loan offset amount) may be rolled over into an eligible retirement plan by the individual’s tax filing due date (including extensions) for the taxable year in which the offset occurs.

Question - Am I correct in saying the new guidance extends the time participant can rollover the value of the offset loan?  The participant is not rolling over the actual loan to the new retirement plan and making loan payments?

core assets rolled over   $40,000 - paid 9/18/2018

Offset Loan                       $10,000

Participant would have until 4/15/2019 to deposit  $10,000 to the account. This would be earmarked as a rollover.

 

[C. B. Zeller]

Correct, because the new law doesn't talk about rolling over a loan, it talks about rolling over a loan offset. The offset is the lump sum distribution of the outstanding balance of the loan. The participant can roll it over by paying the amount of the offset to the rollover account by the appropriate deadline.