IRS Changed Certain Deadlines for SECURE Act and CARES Act Amendments

IRS Changed Certain Deadlines for SECURE Act and CARES Act Amendments

If you’ve been racing to comply with SECURE and CARES Act retirement plan amendment deadlines, take a breath! In August, the IRS issued Notice 2022-33 extending some deadlines.

As reported by the Society for Human Resource Management (SHRM), private sector 401(k) plan sponsors who took advantage of benefit changes under the Setting Every Community Up for Retirement Enhancement (SECURE) Act and the Coronavirus Aid, Relief and Economic Security (CARES) Act were previously required to make plan amendments this year. The deadline for:

  • Calendar year plans were originally December 31, 2022.
  • Non-calendar year plans were the last day of the first plan year beginning on or after January 1, 2022.
  • Collectively bargained plans were the exception, with the deadline being the last day of the first plan year after the start of 2024.

The IRS notice issued August 3 pushed the deadline back to December 31, 2025, for both calendar year and non-calendar year plans, with a few exceptions: Under the CARES Act, the amendment deadline for loans, in-service withdrawals, and temporary suspension of loan repayments remain unchanged.

It is important to note, there are different deadlines for government plans. Government sponsors of 457 (b) plans and 403(b) plans for public school employees have until 90 days after the close of the third regular session beginning after December 31, 2023, to amend the plan (although the deadline for certain 457(b) amendments resolving compliance issues may be later).

The SECURE Act requires employers to extend eligibility for certain part-time employees starting in 2024; ease withdrawals by new parents for birth or adoption expenses; and permanently increase the start date for minimum distributions from age 70 ½ to 72. However, it’s important to note that further guidance is pending.

The CARES Act, which offered flexibility to employers during COVID, suspended minimum distribution requirements in 2020 and made it easier for new parents to make withdrawals for birth or adoption expenses. Plan loan limits were also doubled to the lesser of $100,000 or 100% of a vested account balance.

Should you need professional assistance with adopting the amendments, making the effective date retroactive, and operating plans as if the amendments are in effect, our Spectrum Pension and Compensation Inc. affiliate can help. For almost 30 years, Spectrum has been assisting employers in the Hudson Valley and beyond with employee benefits, including retirement plans, health insurance, and life insurance. The Spectrum team is available to provide technical assistance in plan design, compliance, administration, and record keeping. Click here for their contact information.

For accounting, auditing, and tax support, RBT CPAs is always here to help. Give us a call.