IRS Issues Guidance On CARES Act Retirement Plan Relief

On June 19, 2020, the IRS issued guidance on the CARES Act's coronavirus-related distribution and loan provisions in Notice 2020-50. This Notice provides some helpful administrative detail and expands coronavirus-related distributions in several important ways.

Background on the CARES Act. As discussed in our March 30, 2020 Client Alert, the CARES Act permits plan sponsors to allow "qualified individuals" to:

• Take coronavirus-related distributions of up to $100,000 during 2020, with (i) no early withdrawal 10% additional income tax, (ii) income tax spread over 3 years, and (iii) all tax liability on the coronavirus-related distribution avoided if the distribution is repaid within 3 years;