IRS Provides Welcome Deadline Relief for Savings Arrangement Reporting
On May 28, 2020, the IRS issued Notice 2020-35, guidance that further extends to August 31, 2020, a limited number of deadlines to complete required time-sensitive actions associated with retirement and other savings arrangements. Most awaited was an extension for providing the Form 5498-series information returns for IRAs, health savings accounts (HSAs), Archer medical savings accounts (MSAs), and Coverdell education savings accounts (ESAs).
Notice 2020-35 provides an extension of six weeks beyond the July 15, 2020, contribution deadline, giving financial organizations until August, 31, 2020, to prepare and provide these information returns to the IRS and to account owners:
Form 5498, IRA Contribution Information
Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information
Form 5498-ESA, Coverdell ESA Contribution Information
Note that financial organizations providing these information returns after August, 31, 2020, will be subject to IRS penalty, which will be calculated from September 1, 2020, through the date that the information returns are actually provided.
The deadlines for providing these information returns to the IRS and to account owners had previously been extended by IRS Notice 2020-23 through July 15, 2020, in response to the coronavirus (COVID-19) pandemic. This presented custodial organizations and service providers to these accounts with the dilemma of reporting contributions that could be received as late as the deadline for their reporting.
