(Photo: Diego M. Radzinschi/THE NATIONAL LAW JOURNAL)

The IRS recently posted 14 questions and answers for plan sponsors and third-party administrators regarding coronavirus-related loans and distributions, but they do not answer all of the questions posed by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) retirement plan provisions. While the wait for formal guidance continues, the Q&As confirm that each of the distribution and loan provisions are optional for employers to adopt (or not adopt).

The Q&As also indicate that the formal guidance on distribution and loan provisions should be released in the near future, and that the IRS anticipates this will generally apply the principles set forth in Notice 2005-92 regarding the Katrina Emergency Tax Relief Act of 2005 (KETRA).

Guidance regarding coronavirus-related distributions (CRDs)

Under Section 2202 of the CARES Act, a "qualified individual" may receive special tax treatment for distributions of up to $100,000 from an eligible retirement plan from January 1, 2020, through December 30, 2020. Eligible retirement plans include qualified plans under Code Sections 401(a), 401(k) or 403(a), tax-sheltered annuity plans under Code Section 403(b), eligible deferred compensation plans maintained by governmental employers under Code Section 457(b), and individual retirement accounts/annuities (IRAs) under Code Section 408.