On September 26, 2022, the IRS issued Notice 2022-45, which extends amendment deadlines for retirement plans and IRAs to reflect Section 2202 of the CARES Act and Section 302 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (the Relief Act).
Specifically, the notice delays deadlines to adopt amendments under Section 2202 of the CARES Act regarding favorable tax treatment for coronavirus-related distributions, increases in permissible loan amounts, and suspensions of plan loan repayments. The notice also delays the deadline to adopt amendments under Section 302 of the Relief Act, which provides favorable tax treatment for qualified disaster distributions.
The extended amendment deadline for qualified retirement plans, nongovernmental 403(b) plans and IRAs is December 31, 2025. Generally, the extended deadline applicable to governmental retirement plans and section 403(b) plans maintained by public schools is 90 days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins after December 31, 2023. However, a special rule applies to governmental Section 457(b) plans.
According to the IRS, these deadline extensions were designed to align with those under Notice 2022-33 for amendments regarding the SECURE Act and other CARES Act provisions, so an employer could amend the plan for all these provisions by one date. For more information on the extensions provided under Notice 2022-33, please see our prior article.
The notice also provides anti-cutback relief for CARES Act amendments made by the extended deadline, provided the plan is operated as if the amendment applied as of its original effective date. (The anti-cutback rules generally prohibit decreasing accrued benefits of participants by an amendment to the plan.) However, the notice did not offer similar anti-cutback relief for the Relief Act amendments.
Employers that sponsor retirement plans should be aware of the extensions and consult with their document providers for further information.
Notice 2022-45 »
PPI Benefit Solutions does not provide legal or tax advice. Compliance, regulatory and related content is for general informational purposes and is not guaranteed to be accurate or complete. You should consult an attorney or tax professional regarding the application or potential implications of laws, regulations or policies to your specific circumstances.
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