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- OMNI COVID 19 Updates
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OMNI COVID-19 Information- Significant legislation impacting 403(b)/457(b) plans and sick leave
403(b) and 457(b) plans
The Coronavirus Aid, Relief and Economic Security Act
Specifically, the CARES Act permits a Coronavirus related distribution for up to $100,000 for an individual:
- who is diagnosed with COVID-19;
- whose spouse or dependent is diagnosed with COVID-19; or
- who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care due to COVID-19, closing or reducing hours of a business owned or operated by the individual due to COVID-19.
The legislation also waived the 10% early withdrawal penaly tax and permits those individuals to pay tax on the income from the distribution ratably over a three-year period, with an option to repay all or a portion of the distribution into the plan over the next three years. Those repayments will not be subject to the maximum allowable contribution limits, and will be treated as a rollover contribution.
The CARES Act also doubles the current retirement plan loan limits to the lesser of $100,000 or 100% of the participant's vested account balance in the plan. The loan increase, however, only applies to individuals that would qualify for the Corocavirus related distribution (detaled above) and only until September 23, 2020. Individuals with an outstanding COVID loan from their plan with a repayment due from March 27, 2020 through Dec. 31, 2020 can delay their loan repayment(s) for up to one year.
Finally, the CARES Act waives Required Minimum Distributions for 2020.
NOTE: Any loans or distributions from investments may have severe income implecations. Please consult your tax advisor or your CPA to fully understand tax implecations of your request.
Visit Omni's COVID Webpage for more information on the COVID-19 Information webpage
OMNI Importanct COVID-19 Information