IRS Clarifies Impact of Postponed Tax Deadline on Retirement Plans, IRAs and HSAs

Legal Alert

March 25, 2020

Tax Help

Last week, following President Trump’s March 13, 2020 declaration of a national emergency in response to the COVID-19 pandemic, the Internal Revenue Service (IRS) postponed the April 15, 2020 deadline for filing and paying income taxes to July 15, 2020. See IRS Notice 2020-18. On March 24, 2020, the IRS issued guidance in the form of frequently asked questions to clarify certain aspects of the postponed deadline for filing and paying income taxes. The IRS indicated that it will update the frequently asked questions periodically and additional guidance may be provided.

With respect to qualified retirement plans, individual retirement arrangements (IRAs), and health savings accounts (HSAs), the IRS provided the following clarifications:

The deadline for individuals to make 2019 contributions to their HSA or Archer medical savings account is July 15, 2020.
For employers with a federal income return that would have been due on April 15, 2020, the end of the grace period for making 2019 contributions to their qualified retirement plans under Section 404(a)(6) is July 15, 2020.
Excess elective deferrals made to a qualified retirement plan in 2019 still must be distributed from the plan no later than April 15, 2020 in order for the distribution to be excluded from the participant’s income.
For taxable distributions taken from qualified retirement plans and IRAs in 2019, the deadline for reporting and paying the additional 10% tax due on early distributions from qualified retirement plans and IRAs is July 15, 2020.
The deadline for individuals to make 2019 contributions to their IRA is now July 15, 2020.

If you have any questions about IRS deadlines related to retirement plans and HSAs, please contact your Executive Compensation and Employee Benefits counsel at Smith, Gambrell & Russell, LLP