Most of the deadlines for various forms of relief provided by the Coronavirus, Aid, Relief and Economic Security (CARES) Act have passed. But not all. However, as we wait for this awful year to finally be over, there are deadlines looming wuth regards to utilizing these special provisions for loans and distributions.Let’s quickly revisit some of the more important aspects of the CARES Act before the clock strikes midnight on December 31, 2020:

How do you know if you are a qualified individual for purposes of section 2202 of the CARES Act?

If you had the virus, you obviously qualify. However, most people will be “qualified individuals” if they:

  • Have experienced adverse financial consequences as a result of being quarantined, being furloughed or laid off, or having work hours reduced due to SARS-CoV-2 or COVID-19;
  • Have experienced adverse financial consequences as a result of being unable to work due to lack of child care due to SARS-CoV-2 or COVID-19; or
  • Have experienced adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to SARS-CoV-2 or COVID-19.


How much can the coronavirus-related distribution be for?

The distribution must be from an eligible retirement plan (which includes IRAs) to a qualified individual from January 1, 2020, to December 30, 2020, up to an aggregate limit of $100,000 from all plans and IRAs.

Apparently, if you take a distribution any day this year up to and including December 30, 2020, you can avail yourself of the CARES Act coronavirus-related distribution rules. But you can’t if you take it on December 31st.

Do I have to pay the 10% additional tax on a coronavirus-related distribution from my retirement plan or IRA?

No. The 10% excise tax would not apply.

When do I have to pay taxes on coronavirus-related distributions?

The distributions generally are included in income ratably over a three-year period, starting with the year in which you receive your distribution.


How much can I borrow?

For plan loans made to a qualified individual from March 27, 2020, to September 22, 2020, the limit may be increased up to the lesser of: (1) $100,000 (minus outstanding plan loans of the individual), or (2) the individual’s vested benefit under the plan.

When must I pay it back?

If a loan was outstanding on or after March 27, 2020 (this also applies to loans taken prior to March 27th) and any repayment on the loan is due from March 27, 2020, to December 31, 2020, that due date may be delayed under the plan for up to one year. Any payments after the suspension period will be adjusted to reflect the delay and any interest accruing during the delay.

So it is too late to borrow more than $50,000 but the repayment of a loan may still be delayed for up to a year. If that is done, the remaining loan balance must be re-amortized.

Based in part on a November 6th article from the National Association of Plan Advisors (NAPA)

Finally, the IRS recently came out with its 2021 COLA increases for retirement plans:                                                      2021  


401(k) Annual Deferral & 403(b) Annual Deferral

Additional “Catch-up”

(if age 50 or over)





Defined Contribution

Annual Contribution

$58,000, but not more than 100% of compensation $57,000, but not more than 100% of compensation
Defined Benefit

Annual Benefit

$230,000 $230,000
Annual Compensation $290,000 $285,000
Highly Compensated Employee Compensation Threshold $130,000 $130,000
Key Employee (Officer) Compensation Threshold $185,000 $185,000
Social Security Taxable Wage Base $142,800 $137,700