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This alert summarizes an IRS notice released on June 30 allowing more time to repay RMDs and IRA distributions.

  • The Internal Revenue Service today announced that anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account following the CARES Act RMD waiver for 2020.

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Business Losses and NOLs Expanded

This alert briefly summarizes the following relief provisions enacted in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted on March 27, 2020.
  • Net operating loss (NOL) carrybacks for losses generated after December 31, 2017
  • Postponement of excess business loss limitation and relief for limitations incurred in 2018 and 2019

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The CARES ACT – What It Means To Your IRA and Retirement Accounts

This alert briefly summarizes the following relief provisions enacted in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted on March 27, 2020.
  • Temporary waiver of required minimum distribution (RMD) rules for certain retirement plans and accounts.
  • Temporary waiver of early distribution penalty from tax-qualified plans and special rules related to plan loans.

Recovery Rebates for Individuals

Eligible individuals will receive a refundable tax credit against their 2020 taxable income equal to $1,200 ($2,400 for joint filers) plus $500 per qualifying child. The refund is determined based on the taxpayer’s 2020 income tax return but is advanced to taxpayers based on their most recent income tax filing – the 2018 or 2019 tax return, as appropriate.

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New Jersey: Pass-through Businesses Can Elect To Be Taxed At The Entity Level Starting in 2020

On January 13, 2019, the New Jersey governor signed S. 3246 into law, referred to as the “Pass-Through Business Alternative Income Tax Act” or “BAIT” Act.  The new law creates an election for pass-through entities (PTEs) to pay at the entity level, and creates a corresponding tax credit for its members.  In response to federal tax reform enacted in December 2017, New Jersey was one of several states searching for workarounds to help its residents manage the federal $10,000 SALT deduction limitation and amended Internal Revenue Code (IRC) Section 164.  The BAIT Act was one of those responses and was introduced over a year ago. 

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RMD Age Increased to Age 72

Prior to the SECURE Act, taxpayers were generally required to begin receiving RMDs from their traditional IRAs and certain qualified retirement plans beginning on April 1 of the year following the year they reached age 70 ½.[1] The SECURE Act increased this RMD age to age 72 for all distributions required to be made after December 31, 2019. That is, individuals who attain age 70 ½ after December 31, 2019, will not be required to take mandatory distributions until April 1 of the year following the year in which they attain age 72

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Penalty-free Withdrawals From Certain Retirement Plans For Expenses Related To Child Birth or Adoption

Distributions from traditional IRAs and qualified retirement plans are generally included in income in the year received. With rare exception, distributions before age 59 ½ are subject to a 10-percent early withdrawal penalty on the amount includable in income. A common exception to the early withdrawal penalty is for distributions made in certain cases of emergency or financial hardship.