IRS Broadens 3-Year Extension on CARES, Disaster Tax Relief Acts

Retirement plan sponsors have been given more time to comply with certain provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act) that were not extended under prior IRS guidance.

The IRS has extended the deadline for sponsors of qualified retirement plans, IRAs or annuity contracts to make amendments under those acts.

In Notice 2022-45, the IRS provides that qualified retirement plans (other than governmental plans) and IRAs have until Dec. 31, 2025, to adopt amendments related to coronavirus-related distributions and plan loan relief under the CARES Act, and qualified disaster distributions under the Relief Act, the law firm Eversheds Sutherland notes in a recent alert.

With the notice, the IRS is giving administrative relief for IRA custodians and employers sponsoring plans, Ed Slott of Ed Slott and Co. told ThinkAdvisor Monday in an email.

“The Notice gives custodians and plan sponsors more time to amend their documents to reflect certain CARES Act provisions and changes made by the 2020 disaster relief law,” Slott relayed. “This is similar to the relief the IRS gave [in August] when it extended the deadline for amending documents to comply with other CARES Act provisions and certain SECURE Act changes.”

Ian Berger, an IRA analyst at Ed Slott and Co., added Monday in an interview that the relief deals with the CARES Act provision “that allowed people to take out coronavirus distributions in 2020.” The Relief Act passed in 2020 gave “certain relief for distributions that are necessary for people in disaster areas, not COVID disasters. … There were deadlines for plan sponsors and IRA custodians to amend their documents — this [Notice] is just an extension of those original deadlines.”