Quiero saber acerca de...

Federal Register / Vol. 86, No. 3 / Wednesday, January 6, 2021 / Rules and Regulations accrued benefit is reduced offset in order to repay the loan. This may occur when, for example, the terms governing a plan loan require that, in the event of an employees termination of employment or request for a distribution, the loan is to be repaid immediately or treated as in default. A
plan loan offset may also occur when, under the terms of the plan loan, the loan is canceled, accelerated, or treated as if it is in default for example, if the plan treats a loan as in default upon an employees termination of employment or within a specified period thereafter.
See also 1.72p1, Q&A13a2.
Because a plan loan offset is an actual distribution for purposes of the Code, not a deemed distribution under section 72p, a plan loan offset cannot occur prior to a distributable event. See generally 1.72p1, Q&A13b.

jbell on DSKJLSW7X2PROD with RULES

2. Qualified Plan Loan Offset Amounts Section 13613 of TCJA amended section 402c3 of the Code to provide an extended rollover deadline for qualified plan loan offset QPLO
amounts as defined in section 402c3Cii.3 Any portion of a QPLO
amount up to the entire QPLO amount may be rolled over to an eligible retirement plan by the individuals tax filing due date including extensions for the taxable year in which the offset occurs.
A QPLO amount is defined in section 402c3Cii as a plan loan offset amount that is treated as distributed from a qualified employer plan to an employee or beneficiary solely by reason of:
1 The termination of the qualified employer plan, or 2 The failure to meet the repayment terms of the loan from such plan because of the severance from employment of the employee.
In addition, section 402c3Civ provides that the extended rollover period will not apply to any plan loan 3 In addition to TCJA, other statutory provisions may extend the period to roll over a plan loan offset. For example, section 2202a of the Coronavirus Aid, Relief, and Economic Security Act, Public Law 116136, 134 Stat. 281 2020
CARES Act, permits an individual to receive from an eligible retirement plan up to $100,000 for a coronavirus-related distribution which may include a plan loan offset that otherwise meets the requirements to be a coronavirus-related distribution. A qualified individual with a coronavirus-related distribution which may be included in gross income ratably over the 3-year period beginning with the taxable year of the distribution may recontribute up to the amount of the distribution to an applicable eligible retirement plan in which the individual is a beneficiary and to which a rollover can be made. For further information relating to the interaction of section 2202 of the CARES Act and plan loan offsets, see Notice 202050, 202028 I.R.B. 35.

VerDate Sep<11>2014

16:19 Jan 05, 2021

Jkt 253001

offset amount unless such plan loan offset amount relates to a loan to which section 72p1 does not apply by reason of section 72p2.
Section 301.91002b of the regulations provides rules for automatic six-month extensions to make regulatory or statutory elections. Under this rule, a taxpayer will receive an automatic extension of 6 months from the due date of a return, excluding extensions, to make elections that otherwise must be made by the due date of the return plus extensions, provided that:
1 The taxpayers return was timely filed for the year the election should have been made; and 2 The taxpayer takes appropriate corrective action within the six-month period.
Section 301.91002b further provides that paragraph b does not apply to regulatory or statutory elections that must be made by the due date of the return excluding extensions.
Notice of Proposed Rulemaking 1. In General On August 20, 2020, the Department of the Treasury Treasury Department and the IRS published a notice of proposed rulemaking REG11647519
in the Federal Register 85 FR 51369
setting forth rules in new 1.402c3
for qualified plan loan offsets QPLO
proposed regulations. As described in the background of the preamble to the QPLO proposed regulations, the Treasury Department and IRS anticipate providing separate guidance with respect to Division O of the Further Consolidated Appropriations Act of 2020, Public Law 11694 133 Stat.
2534, titled Setting Every Community Up for Retirement Enhancement Act of 2019 SECURE Act. As part of that guidance, the Treasury Department and IRS anticipate amending 1.402c2 to reflect changes made by section 114 of the SECURE Act relating to changes to section 401a9 of the Code to the required beginning date applicable to section 401a plans and other eligible retirement plans described in section 402c8 and to add new level designations for each paragraph in the questions and answers to satisfy Federal Register requirements. It is anticipated that 1.402c3, which includes both the new QPLO rules and already existing plan loan offset rules in Q&A
9 of 1.402c2, will be combined with 1.402c2 in connection with that project including replacing Q&A9 of 1.402c2 with paragraph a of 1.402c3.
As an initial matter, the QPLO
proposed regulations confirm that a
PO 00000

Frm 00027

Fmt 4700

Sfmt 4700

465

QPLO is a type of plan loan offset;
accordingly, most of the general rules relating to plan loan offset amounts apply to QPLO amounts. For example, the rule that a plan loan offset amount is an eligible rollover distribution applies to a QPLO amount. In addition, the rules in 1.401a311, Q&A16
guidance concerning the offering of a direct rollover of a plan loan offset amount, and 31.3405c1, Q&A11
guidance concerning special withholding rules with respect to plan loan offset amounts, applicable to plan loan offset amounts in general, apply to QPLO amounts. The QPLO proposed regulations provide examples to illustrate the interaction of the special rules for QPLOs with the general rules for plan loan offsets.
2. Rollover Period for Plan Loan Offset Amounts, Including QPLO Amounts Section 1.402c3a2iiA of the QPLO proposed regulations provides that a distribution of a plan loan offset amount that is an eligible rollover distribution and not a QPLO amount may be rolled over by the employee or spousal distributee to an eligible retirement plan as defined in section 402c8B within the 60-day period set forth in section 402c3A. While a plan loan offset generally is subject to this 60-day rollover period, there are special rules for the waiver of the 60day rollover deadline.
Section 1.402c3a2iiB of the QPLO proposed regulations provides that a distribution of a plan loan offset amount that is an eligible rollover distribution and a QPLO amount may be rolled over by the employee or spousal distributee to an eligible retirement plan through the period ending on the individuals tax filing due date including extensions for the taxable year in which the offset is treated as distributed from a qualified employer plan. Thus, a taxpayer with an eligible rollover distribution that is a QPLO
amount may roll over any portion of the distribution to an eligible retirement plan, including another qualified retirement plan if that plan permits or an IRA, by the taxpayers deadline for filing income taxes for the year of the distribution, including extensions.4
4 For a detailed discussion of the application of 301.91002b which provides rules for automatic six-month extensions to make regulatory or statutory elections to the extended rollover period for QPLO amounts, see the preamble discussion in the Explanation of Provisions section of the QPLO
proposed regulations, under the heading, Rollover Period for Plan Loan Offset Amounts, Including QPLO Amounts.

E:FRFM06JAR1.SGM

06JAR1