Regulatory and Legislative
Legislation Would Allow Delay of 2020 Retirement Contributions
September 16, 2020 – Senator Ted Cruz (R-TX) has introduced S. 4539, legislation that includes coronavirus (COVID-19) liability protection for businesses and healthcare providers, a tax credit for employer COVID-19 testing programs, funds for safe schooling, as well as several retirement provisions.
The following retirement provisions are included in the Reinvigorating the Economy, Creating Opportunity for every Vocation, Employer, Retiree & Youth (RECOVERY) Act.
- Permit “unused” 2020 IRA contribution and employer plan deferral limitations to be carried over and contributed in 2021 and/or 2022, without reducing otherwise-available 2021 and 2022 contribution or deferral limitations.
- Allow a coronavirus-related distribution (CRD) from an employer-sponsored retirement plan that permits loans to be converted to a plan loan, which—assuming loan conditions were met—would make such CRDs non-taxable while they are maintained as a plan investment. (IRAs do not permit loans, so CRDs from IRAs could not be converted to loans.)
- Permit the substitution of “indexed basis” for “adjusted basis” when determining gain or loss on an indexed retirement asset held for more than three years.
- 4539 has been referred to the Senate Finance Committee.
