As we continue to navigate through this uncertainty, we wanted to highlight a few items from the recent legislation as they relate to retirement plans, and how we intend to work on your retirement plan remotely while we are away from our offices.
Retirement Plan changes under the new law:
1) The 10% penalty on early withdrawals from qualified plans (IRA’s and Defined contribution plans) for coronavirus related distributions will be waived. These withdrawals are limited to $100,000, the distribution must be made during 2020, to an individual (or spouse) diagnosed with COVID 19 with a CDC approved test, or someone who experiences adverse financial consequences as a result of quarantine, business closure, layoff or reduced hours. Income attributable to this withdrawal is subject to tax over 3 year period. Employees can recontribute back to the plan as long as within 3 years.
2) Loans from retirement plans are allowed up to $100,000 (up from $50,000) and repayment of existing plan loans that came due between the enactment of the CARES Act and 12/31/20 is extended by one year
3) A temporary waiver of required minimum distributions required to be made in 2020 for IRA’s and certain defined contribution plans, regardless of whether or not the taxpayer has been impacted by the pandemic. The waiver includes minimum distributions that are due by 4/1/20 for those who turned 70 ½ in 2019.
4) Eligible rollover distributions may be invoked for certain RMDs taken in 2020 before the CARES act became law.
For the retirement plan provisions, we would suggest that you reach out to your third party provider as to next steps.
Performing retirement plan audits while we are away from our offices:
1) Our technology allows us to work remotely through a secure environment. All of our team members have the necessary remote access tools to complete our work effectively.
2) Security of sensitive information is important to us. We will ensure that data is transmitted in a safe and secure manner.
3) Regular communications between you and the M&M team will remain a priority. We will schedule regular check-in meetings with you to address questions, request additional information and provide status updates.
4) Engagement quality will remain at the highest standard. We are well versed in performing audits remotely.
5) We will work with you to schedule the work to minimize the disruption to your team. Given the current environment, this is critical to a successful audit.
The above factors will allow us to continue to meet your retirement plan audit and tax needs. With the continued uncertainties in the coming months, it will give you the piece of mind to know that your services will be completed and all deadlines will be met.
Contact us and let us help.