IRS Extends Deadlines for Certain Tax Regime Changes | Knowledge

The United States Internal Revenue Service (IRS) recently issued Notice 2022-33 (the Notice), extending the time limits for amending certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 (the SECURE Act), the Bipartisan American Miners Act of 2019 (the Miners Act) and the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). Prior to the Notice, this legislation generally required tax registered pension plans to adopt certain amendments by the last day of the plan’s first year beginning on or after January 1, 2022.

Extended deadlines:

  1. SECURE Act and Minors Act

The notice delays the deadlines for passing one of the amendments under the SECURE Act as well as amendments to lower the minimum in-service distribution age to 59.5 years in qualified pension schemes and schemes 457(b) government under the Juveniles Act. The new change deadlines are as follows:

Diet type

Deadline extended

Tax-eligible plans (other than government plans) and 403(b) plans not for public school employees, including collectively bargained plans

December 31, 2025

Qualified government plans, 457(b) and 403(b) plans for public school employees

Generally 90 days after the close of the third regular legislative session of the legislative body with the power to amend the plan that begins after December 31, 2023

The Notice also provides an exemption from the anti-reduction rules (which generally prohibit plan amendments that reduce a member’s accrued benefits) for such amendments made before these deadlines.

  1. CARES Act Requires Minimum Distribution Waiver

Notice extends CARES Act deadline uniquely for plan amendments that cover the 2020 waiver of required minimum distributions. This extended deadline reflects the deadlines described above for the SECURE law depending on the type of plan concerned.

Amendments enacted before these extended deadlines may apply retroactively to the effective date specified in the amendment, but the plan must operate as if the amendment were in effect for the entire period following such effective date.

Deadlines that were not extended:

  1. CARES Act: Notably, the notice does not extend the amendment deadline for special covid-19 relief regarding coronavirus-related special distributions, a higher plan loan cap, and a suspension of loan repayments permitted under the CARES Act. . Therefore, plan sponsors should plan to adopt amendments to these provisions, if any, before the original deadline – the end of the plan’s first year beginning on or after January 1, 2022.
  2. Pre-amendment deadlines: The notice does not extend previous statutory deadlines, such as the applicable changes to hardship distributions implemented by the 2018 Bipartisan Budget Act.

Katie Dean, knowledge management lawyer, contributed to this Sidley update.

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