Qualified retirement plans are a key component of financial security for owners and their employees. The SECURE Act in December 2019 and the CARES Act in March 2020 made significant changes in various rules related to retirement plans. Incentives for small businesses to adopt plans have increased and special rules related to COVID-19 have been put in place to enable employees to tap their accounts now. But taking advantage of favorable law changes requires owners to take action.COVID-19 Actions for Existing Retirement Plans
Your company’s 401(k) or other retirement plan can be a source of financial help to employees that may be struggling as a result of the pandemic. The plan isn’t required but can permit qualified individuals to take COVID-1 distributions up to $100,000 (with special tax treatment for participants who take them) and loans up to $100,000 (with special rules for the suspension of loan repayments) from March 27, 2020, through December 31, 2020.
Follow the rules. The plan isn’t required to offer these COVID-19 incentives, but if it does, be sure to comply with tax rules. COVID-19 distributions means they are restricted to an individual, spouse, or dependent who is d