Page 152 - FebDefComp
P. 152
Provisions that became effective Disaster Tax Relief
immediately upon enactment of the
law, or have an effective date no The Taxpayer Certainty and Disaster Tax
later than January 1, 2020. Relief Act extends certain expired or
expiring tax provisions and also offers
Provisions that are dependent upon
the start of the plan's plan year, or additional disaster relief to individuals
the employer's tax year, beginning impacted by a presidentially-declared
after December 31, 2019. For plans natural disaster. This relief applies to
that operate on a calendar year individuals who suffered losses in a
basis, the effective date for these qualified disaster area beginning on
provisions is January 1, 2020. The January 1, 2018 and ending 60 days after
effective date for off-calendar year the President signed the Act into law (i.e.,
plans will be sometime after January ending on February 18, 2020). Relief under
1, 2020, depending upon the plan the Act is not extended to California
year start date. wildfire disaster areas. Disaster tax relief
includes:
Provisions that will have an effective
date later than either of the first two Special disaster-related rules for use of
categories, or an effective date has retirement funds, including: (i) a provision
yet to be determined. that extends the waiver of the 10%
additional income tax penalty for qualified
disaster distributions from retirement plans
Other Changes up to $100,000. Individuals can include in
income ratably over a three year period
There was other legislation included in the and are permitted to repay the amount
appropriations bill that was not part of back to the plan; (ii) hardship distributions
SECURE Act, but does impact retirement taken from a retirement plan for a first-time
plan administration. home purchase in a disaster area whose
transaction was terminated due to the
Reduction in minimum age for disaster can recontribute the amount
allowable in-service back into the plan without tax penalty
distributions (subject to certain timing restrictions); and
(iii) loan limits can be increased from
Section 104 of the Bipartisan American $50,000 to $100,000 and a one-year
Miners Act changes the voluntary in- repayment extension is available.
service distribution age for defined benefit Automatic extension of filing deadlines in
plans, money purchase pension plans, case of certain taxpayers affected by
and governmental 457(b) plans from age Federally declared disasters. This provision
62 to age 59 1/2. This change is effective provides individuals who are impacted by
for plan years beginning after December natural disasters a 60-day extension to file
31, 2019.
returns, pay taxes, and to accomplish
© 2020 Massachusetts Mutual Life Insurance Company (MassMutual®), Springfield, MA 01111-0001.
All rights reserved. www.MassMutual.com.
RS4153x2 1217 CRN: RS-48317-00
