IRS Notice 2020-23 Extends Deadlines for Employee Benefit Plans

JENNIFER D. TRUONG, May 7, 2020

  Under IRS Notice 2020-23, the Internal Revenue Service (IRS) has provided additional relief due to the coronavirus pandemic by extending the deadlines for the time-sensitive actions set forth in Revenue Procedure 2018-58.1 Specifically, the Notice extends the deadlines for filings and other actions that would otherwise be due on or after April 1 and before July 15, 2020 — these applicable deadlines are now automatically extended to July 15, 2020. Affected individuals/entities do not need to call the IRS, file any extension forms, or send documents to receive this relief, and the affected individuals/entities do not have to be impacted by the coronavirus pandemic to avail themselves of the extensions. On April 28, 2020, the IRS also updated its FAQs on coronavirus pandemic filing and payment relief to incorporate the expanded relief provided by Notice 2020-23. Included among the extended deadlines provided by the Notice and FAQs are the following time-sensitive actions that affect employee benefit plans and Health Savings Accounts (HSAs).2

  • The 60-day window to roll over amounts from one HSA to another HSA is affected: Thus, participants will have until the later of (i) 60 days after receipt of the distribution, or (ii) July 15, 2020 to complete the HSA rollover.   
  • HSA participants will now have until July 15, 2020 to make contributions to their HSAs for 2019 (up to the applicable contribution limit) because the due date for filing federal income tax returns is now July 15, 2020.
  • Cafeteria plan sponsors may amend their plans to allow employees with election deadlines originally due between April 1, 2020 and July 14, 2020 (e.g., open enrollment for cafeteria plans with fiscal plan years, new hires, mid-year permitted life events, etc.) to have until July 15, 2020 to make or change their elections.*
  • Health flexible spending account and dependent care flexible spending account plans with plan years (including grace periods, if applicable) ending April 1 through July 14, 2020 may be amended to allow participants to have until July 15, 2020 to incur reimbursement expenses.*

*Note: Employers who choose to permit such extensions will need to execute a plan amendment to effectuate the change.

_____________

1Revenue Procedure 2018-58 does not on its own extend the time to file or take certain actions; however, it lists the actions that may be extended by future IRS guidance in the event of a federally declared disaster.

2For information about how IRS Notice 2020-23 applies to retirement plans, please refer to this article by Catherine Reagan and Kevin Nolt: The IRS Extends Retirement Plan Payment and Filing Deadlines.