IRS Extends Repayment Deadline for Outstanding Loans

Notice 2020-23, which was issued by the IRS on April 9, 2020, extended numerous tax code deadlines related to employee benefit plans, including participant loan repayments. The Notice applies to all plan loan repayments otherwise due between April 1 and July 15 and extends the time to make such payments to July 15.

As a practical matter, this means no participant loan will be in default for failure to make a timely payment during this period, and late fees will not be assessed on home-billed loans (although interest will continue to accrue).

Additionally, qualified plan loan offsets can be rolled into another plan or IRA up to July 15.

If you have any questions, please contact your local Mutual of America representative.

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