IRS Notice 2020-23
Q: What is IRS Notice 2020-23?
IRS Notice 2020-23 is a regulation issued by the Internal Revenue Service regarding the deadline for certain acts that must be performed by taxpayers. For NYCERS purposes, IRS Notice 2020-23 allowed members to defer payment on any outstanding loan that were not in default for the period from April 1, 2020 until July 15, 2020. This regulation also extended the deadline to complete a rollover of an eligible distribution.
Q: Who can take advantage of loan deferment under IRS Notice 2020-23?
Any NYCERS member with an outstanding loan that was not in default could request loan payment deferment under IRS Notice 2020-23 by submitting NYCERS Form #402. There were no qualification requirements for this deferment. The act has expired and the form is no longer available.
Q: How can I get a deferment on paying my NYCERS loan under IRS Notice 2020-23?
During the time period, you could submit NYCERS Form #402 to request deferment of a loan under IRS Notice 2020-23. The act has expired and the form is no longer available.
Q: Is interest charged during the IRS Notice 2020-23 deferment period?
Interest did not accrue while your loan was deferred pursuant to IRS Notice 2020-23.
Q: Does IRS 2020-23 eliminate payment of loan insurance?
IRS Notice 2020-23 did not eliminate payment of loan insurance during the deferment period; by law, your loan must remain insured. Your loan insurance premium for the deferment period would be added to your outstanding loan balance when your payments resume.
Q: Can I benefit from this loan deferment if my loan is already in default?
No. You could not defer payments under IRS Notice 2020-23 if your loan was already in default.
Q: How will this affect the 5-year repayment limit if I take a deferment under IRS Notice 2020-23?
The loan must still be repaid within 5 years, which may result in higher payments.
Q: What happens if I don’t repay the loan?
Failure to make required payments on your loan once the deferment period had ended would place your loan in default, and the outstanding loan balance would be reported to the Internal Revenue Service as income.
Q: How does IRS Notice 2020-23 affect my rollover of an eligible distribution?
If the deadline for you to complete the rollover of an eligible distribution fell between April 1, 2020 and July 14, 2020, you had an extension until July 15, 2020 to complete the rollover.