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 allows members to defer payment on any outstanding loan that is not in default for the period from April 1, 2020 until July 15, 2020. This regulation also extends 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 is not in default may request loan payment deferment under IRS Notice 2020-23 by submitting NYCERS Form #402. There are no qualification requirements for this deferment.
Q: How can I get a deferment on paying my NYCERS loan under IRS Notice 2020-23?
Please submit NYCERS Form #402 to request deferment of a loan under IRS Notice 2020-23. You may also submit a Service Request in your secure MyNYCERS account.
Q: Is interest charged during the IRS Notice 2020-23 deferment period?
Interest does not accrue while your loan is deferred pursuant to IRS Notice 2020-23.
Q: Does IRS 2020-23 eliminate payment of loan insurance?
IRS Notice 2020-23 does 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 will 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 cannot defer payments under IRS Notice 2020-23 if your loan is 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 has ended will place your loan in default, and the outstanding loan balance will 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 falls between April 1, 2020 and July 14, 2020, you have an extension until July 15, 2020 to complete the rollover.