Loan Suspension under CARES Act

If I am a "qualifying participant" pursuant to the CARES Act, and I take a loan today and request a suspension of the payments, when would my first payment be due?

I thought it would be June 1, 2021 (i.e., a full 12 month suspension), but I have seen a reference to January 1, 2021, and a separate reference to March 27, 2021, as the next payment date for any loan suspended as per the CARE Act.

Thank you in advance for your guidance.

It's likely going to January 1, 2021 (or 1st payroll after that). But this is an area where further IRS guidance is needed.

We have a participant who requested a 72 month loan today and we're also navigating those waters. We can issue the CRL for 60 months and extend the 12 months for payment but not issue a 72 month personal loan - or at least that is my understanding. IRS Guidance would be much appreciated here.

sb0282 and Ms. Martinez, probably no 72-month loans. Although as Lou S. says, we don't really know without IRS guidance (because the statutory language has, let's say, some gaps), one possible scenario would be that repayment would need to start January, 2021, as noted by Lou S., and  then the July - Dec, 2020 payments get pushed to July-Dec, 2026. But again, no assurance. The good thing is that all you need to know for now, at least until later this year in preparation for starting payments in 2021, is that no payments are due until 2021.

16 hours ago, Caroline Martinez said:

We have a participant who requested a 72 month loan today and we're also navigating those waters. We can issue the CRL for 60 months and extend the 12 months for payment but not issue a 72 month personal loan - or at least that is my understanding. IRS Guidance would be much appreciated here.

Right, thats an easy NO.  The loan itself has to be limited to 5 years (except for a principal residence loan).  The delay of repayment is a separate issue.  You would have to issue the loan at 60 months, immediately suspend loan payments until [date pending guidance], and then extend the loan repayment period by [pending guidance]. In the end it may be 72 months, but more likely 67 months if the loan was issued today.

8 hours ago, RatherBeGolfing said:

Right, thats an easy NO.  The loan itself has to be limited to 5 years (except for a principal residence loan).  The delay of repayment is a separate issue.  You would have to issue the loan at 60 months, immediately suspend loan payments until [date pending guidance], and then extend the loan repayment period by [pending guidance]. In the end it may be 72 months, but more likely 67 months if the loan was issued today.

Thank you for the support here! We issued the 5 year loan and explained the delay in payment option to PP, fingers crossed it'll indeed end up being close to the 72 month time frame for his benefit.