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CARES ACT


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Hi, 

Participant had taken a CARES Distribution and had sent a cashier check ( repayment of the CARES Distribution).  Th plan is terminating and the participants status was flipped to "T" and since the part has a "T" status in the plan, can this check be posted into the terminating plan? or an IRA account? 

If we can not post it into the terminating plan, is there a reason why we cant do it? 

Thanks

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Without researching, I'm not aware of any restrictions on terminated participants repaying CARES distribution to a plan.  

Your question really revolves around system limitations and should be addressed to the recordkeeper.  Or take the easy way out and "flip" the status back to "A" or whatever it takes and then back to T if that suits your fancy.  We generally don't update status to terminated until it is time to pay out for reasons such as this.

Ed Snyder

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The statute and Notice 2020-50 suggest that recontributions should be permitted to the extent the same participant would otherwise be eligible to make an inbound rollover into the plan.

I think you can apply the same rule here, i.e., if this participant wanted to roll in a balance from a previous employer's 401(k) plan at this point, would you let them? 

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