The IRS and Treasury Department have finalized regulations that extend the time individuals have to roll over qualified plan loan offset amounts from 60 days to their tax filing due date (including extensions) for the year the offset occurs. This extension was established under the Tax Cuts and Jobs Act to help participants in employer-sponsored retirement plans who have an outstanding loan balance when they either leave their job or when their employer plan terminates. These regulations are effective from January 1, 2021, but individuals can choose to apply them to offsets deemed distributed on or after August 20, 2020. The regulations aim to simplify the process for taxpayers and provide clearer guidelines for plan administrators.
Simple Explanation
The government has made a new rule that gives people more time to move money from a special loan in their work retirement plan if they leave their job or the plan ends. Now, instead of just 60 days, they have until the day they need to file their taxes for that year, which makes it a little easier for everyone.