Tax Deadlines Related to COVID-19 Affect HSAs and Retirement Plans
- Learn more about the IRS’s latest tax extension deadlines.
- Find out how the extended deadlines affect excise tax returns.
- Learn how the new deadlines apply to corrective actions regarding compliance statements.
- Learn more about the new deadline for Form 5498 (”IRA Contribution Information”).
The IRS recently issued another notice extending tax deadlines because of the COVID-19 pandemic. Notice 2020-35 supplements IRS Notice 2020-23 and earlier guidance. It extends the deadlines for certain additional time-sensitive actions relating to employment taxes; exempt organizations; employee benefit plans, including 401(k)s; Health Savings Accounts (HSAs); IRAs; and other specified accounts.
With some exceptions, the extensions apply only to actions due to be performed on or after March 30, 2020, and before July 15, 2020 (the relief period). If a time-sensitive action required by the Internal Revenue Code has a parallel with the Employee Retirement Income Security Act, the extension applies to both. We’re sure you all have questions related to these changes. So, Fiducial has highlights of the extensions affecting 401(k) plans and HSAs. Read on for more!
Do excise tax returns have an extended tax deadline?
The relief period is disregarded when determining any interest or penalty resulting from the failure to file a return of excise taxes on Form 5330 (“Return of Excise Taxes Related to Employee Benefit Plans”), or to pay any “associated” excise taxes. Interest and penalties for failures relating to postponed filings and payments will begin to accrue on July 16, 2020.
Employee plans compliance resolution system
Plan sponsors who received a compliance statement under the IRS’s Voluntary Compliance Program that requires corrective action during the relief period have until July 15, 2020, to complete that action. The tax extension applies to all corrective actions required by a compliance statement. This includes the adoption of corrective amendments.
Tax deadlines for Form 5498 (“IRA Contribution Information”)
The usual deadline for trustees and custodians to file and furnish account holders with Form 5498-SA for HSAs, Archer Medical Savings Accounts (MSAs) or Medicare Advantage MSAs is June 1, 2020. This deadline has been postponed to August 31, 2020.
As explained in the form’s instructions, some people who received a statement of their account’s fair market value by February 1, 2020, wouldn’t have to receive another statement or a copy of Form 5498-SA. The deadline for filing Form 5498 for IRA contributions — including contributions to a deemed IRA in a 401(k) plan — has also been postponed. The new deadline is August 31, 2020. Penalties for postponed filings that aren’t filed by the extended deadline will begin to accrue on September 1, 2020.
Careful readers may notice that the starting date of the relief period under this guidance — March 30, 2020 — begins two days earlier than the date provided in previous IRS guidance, which generally applied only to actions due on or after April 1, 2020. However, this change does not extend to the earlier guidance.
Have questions about these tax extensions and deadlines? Call Fiducial at 1-866-FIDUCIAL or make an appointment at one of our office locations. Ready to book an appointment now? Click here. Know someone who might need our services? We love referrals!
For more small business COVID-19 resources, visit Fiducial’s Coronavirus Update Center to find information on SBA loans, tax updates, the Paycheck Protection Program, paid sick and family leave, and more.
