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IRS Guidance on Repayment of Coronavirus-Related Distributions (CRDs)

By August 31, 2020No Comments

The CARES Act permits certain eligible 401k Plan participants to take coronavirus-related distributions (CRDs) during 2020. The CARES Act also provides that CRDs may be “repaid”. IRS guidance recently clarified that “repayment” is done by a “rollover contribution” to the same Plan or a new employer’s Plan that allows rollovers, or a rollover contribution to an IRA. Full or partial “repayment” is permitted. Multiple “repayments” can occur. The 60-day rollover time limit does not apply; instead, the “repayment” deadline is three (3) years after the CRD was taken. Taxation and tax refunds are reconciled through the participant’s personal return. ACSI (www.acsi-ny.com or mbrand@acsi-ny.com) is available to assist clients whose employees want to make CRD repayments to the client’s Plan.