IRS Tax Tip
Relief for taxpayers affected by COVID-19 who take distributions or loans from retirement plans
Notice 2020-50 is intended to help retirement plan participants affected by the COVID-19 coronavirus take advantage of the CARES Act provisions providing enhanced access to plan distributions and plan loans. This relief includes expanding the categories of individuals eligible for these types of distributions and loans and providing guidance and examples on how qualified individuals will reflect the tax treatment of these distributions and loans on their federal income tax filings. As authorized under the CARES Act, Notice 2020-50 expands the definition of who is a qualified individual to take into account additional factors such as reductions in pay, rescissions of job offers, and delayed start dates with respect to an individual, as well as adverse financial consequences to an individual arising from the impact of the COVID-19 coronavirus on the individual’s spouse or household member.
On another note, if you have a High Deductible Health Insurance plan this will be of interest to you:
IRS outlines changes to health care spending available under CARES Act
The IRS has advised that new rules under the CARES Act provide flexibility for health care spending that may be helpful in the current environment where more people may need at-home services due to measures to fight the coronavirus.
Telehealth and high deductible health plans
Under the CARES Act, a high deductible health plan (HDHP) temporarily can cover telehealth and other remote care services without a deductible, or with a deductible below the minimum annual deductible otherwise required by law. Telehealth and other remote care services also are temporarily included as categories of coverage that are disregarded for the purpose of determining whether an individual who has other health plan coverage in addition to an HDHP is an eligible individual who may make tax-favored contributions to his or her HSA.
Expansion of qualified medical expenses
The CARES Act also modifies the rules that apply to various tax-advantaged accounts (HSAs, Archer MSAs, Health FSAs, and HRAs) so that additional items are “qualified medical expenses” that may be reimbursed from those accounts.
About Your IRS Notice or Letter
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Back to School? Learn about Tax Credits for Education
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IRS Urges Taxpayers to Check Their Withholding; New Factors Increase Importance of Mid-Year Check Up
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IRS, Security Summit Partners Remind Taxpayers to Recognize Phishing Scams READ MORE
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2017 Standard Milage Rates for Business Announced. READ MORE
IRS, States, Industry Urge Taxpayers to Learn Signs of Identity Theft READ MORE