Since passage of the CARES and SECURE Acts, we’ve seen several deadline and policy shifts in relation to employee stock ownership plans. On April 9, 2020, the IRS further redefined this year’s ESOP management calendar.
Notice 2020-23 extended a series of ESOP-related payment obligation and filing deadlines to July 15, 2020, for activities that would have normally been performed between April 1 and July 14, 2020. These include:
- Qualified participant investment elections
- Dividend distributions from C corporations to ESOP participants
- Establishing put options for employer security repurchases
- Payment for employer security repurchase obligations
- Commencement of participant account balance distribution
- Qualified replacement property (QRP) election by recent selling shareholders
- Filing 5500-series forms (Annual Return/Report of Employee Benefit Plan) and Form 8955-SSA (Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits)
All were previously identified in Revenue Procedure 2018-58, which clarified extension deadlines during federally-declared disasters or military conflicts.
If you have questions about the April 2020 IRS notice, or if you plan to act on these deadline extensions, consult your tax or legal advisors. Our team is also available as an added resource. Please don't hesitate to email (info@csgpartners.com), call (212.443.5500), or schedule a meeting online.
