United States

IRS pushes deadlines for some employee benefits and exempt orgs

TAX ALERT  | 

On May 28, 2020 the IRS released Notice 2020-35 amplifying the relief granted under Notice 2020-23 by expanding the definitions of “Affected Taxpayers” and “Time-Sensitive Actions” to include certain employment tax, employee benefit and exempt organization matters. 

The Notice postpones deadlines for certain Time-Sensitive Actions that are generally due on or after March 30, 2020, and before July 15, 2020. The revised deadline for an Affected Taxpayer to perform a Time-Sensitive Action is July 15, 2020, unless a different deadline is specified. 

The Time-Sensitive Actions for employment related filings include:

  • Employment taxes – Correcting employment tax reporting errors using the interest-free adjustment process under sections 6205 and 6413.
  • Qualified employee benefit plans – 
    • Funding waiver application for a defined benefit pension plan that is not a multiemployer plan;
    • Multiemployer plans’ certification of funded status and notice to interested parties of the certification, adoption and notification of a funding improvement plan or rehabilitation plan, and the annual update of a funding improvement plan or rehabilitation plan (and the filing of the updates with Form 5500);
    • Cooperative and small employer charity pension plans’ contributions, required quarterly installments, adoption of a funding restoration plan, and certification of funded status;
    • Interest and penalties for failure to file Form 5330 or pay excise tax are postponed and will begin to accrue on July 16, 2020;
    • Initial remedial amendment period for 403(b) plans is extended to June 30, 2020;
    • Adoption of a pre-approved defined benefit plan that was approved based on the 2012 Cumulative List and submission of a determination letter application for the second six-year remedial amendment cycle is extended to July 31, 2020;
    • Implementation of corrective actions or amendments from a compliance statement issued under the Voluntary Correction Program of the Employee Plans Compliance Resolution System; and
    • Approval request for a substitute mortality table.

It should be noted that the Notice also applies for purposes of ERISA provisions which parallel those of the Internal Revenue Code.

  • Individual retirement arrangements (IRA), Coverdell education savings accounts, Health savings accounts (HSAs), Archer and Medicare Advantage medical savings accounts (MSAs) – The due date for filing Form 5498, Form 5498-ESA and Form 5498-SA is postponed to August 31, 2020. Thus, penalties will begin to accrue on Sept. 1, 2020. 

The guidance also extends the deadline to July 15 for all Form 990-N filings originally due between March 30 and July 15, and all filings for declaratory judgment pursuant to section 7428, with respect to a denial or termination of 501(c)(3) exempt status, originally due between March 30 and July 15.

Additionally, the Notice provides a waiver of the Certified Professional Employer Organization (CPEO) magnetic media (including electronic filing) filing requirement for certain employment tax returns under section 31.3511-1(g)(2) for the second, third and fourth quarters of 2020. The waiver is extended to all CPEOs, removing the need for individual waiver requests. 

AUTHORS


HAVE A COVID-19 TAX RELIEF QUESTION?


STAY INFORMED - Tax alerts and insights