The IRS recently announced it will be extending relief for the CARES Act for participants in a plan to include a spouse who was laid off. A ‘qualified individual’ definition now includes reductions in pay, recession of job offers or a delayed start date, and adverse financial consequences to an individual arising from the impact of COVID-19 on an individual’s spouse or household member. Many plan participants who were fortunate enough to continue working, nonetheless had financial issues when their spouse lost income due to curtailed hours or a lay-off, so this update is a welcome addition to the CARES Act for them.
Remember, employers still have the choice to implement these coronavirus-related distribution and loan rules for their plan, and can rely on the participant to certify that they are a qualified individual.
Please contact Tycor if you have any questions about the CARES Act and its effect on your own plan.