The COVID-19 crisis is one rife with uncertainty. As such, NARFE is serving as the go-to resource for information about federal benefits, informing both federal retirees and employees of resources, policies, and laws that will benefit or affect them during the coronavirus pandemic. From stimulus payments to the Thrift Savings Plan (TSP) to guidance from the Office of Personnel Management (OPM), NARFE is here to help you navigate the latest developments. If you have any questions about the FAQs below, please contact the NARFE advocacy department at advocacy@narfe.org.

The Coronavirus Aid, Relief and Economic Security (CARES) Act Payments

The Emergency Paid Sick Leave Act

Reopening Federal Agencies

Other Federal Guidance on COVID-19

COVID-19 Emergency Financial Assistance for Federal Employees

COVID-19 Response Related Federal Job Opportunities

How NARFE Is Protecting Federal Employees and Retirees During the COVID-19 Crisis

Required Minimum Distributions Suspended for 2020


The Coronavirus Aid, Relief and Economic Security (CARES) Act Payments

Q: Am I eligible for a stimulus payment from the Coronavirus Aid, Relief and Economic Security (CARES) Act?

A: The CARES Act provides direct cash payments of $1,200 per adult ($2,400 for a married couple), and $500 per child. Both retirees and workers (or those unemployed) are eligible for the payments. The only individuals excluded from receiving payment are nonresident aliens and those claimed as a dependent on someone else’s tax returns.

The cash payments get smaller or are eliminated for those with higher incomes, phasing out at a rate of $5 for every additional $100 in income above the following thresholds: $75,000 in adjusted gross income for single filers, $112,500 for heads of household and $150,000 for married couples filing jointly. This phase-out would be based on adjusted gross income as reported on 2019 tax returns, or 2018 returns if the taxpayer has not yet filed their 2019 taxes

Individuals who receive Social Security or railroad retirement benefits who also did not file a tax return for 2018 or 2019 will automatically receive a stimulus payment (if eligible based on income). However, federal annuitants who did not file a tax return in 2018 or 2019 and who do not collect a Social Security benefit are not currently eligible to receive stimulus payments automatically. If this applies to you, visit the IRS website and enter your information to receive payment.

The IRS will send the payment via direct deposit, if the bank information is available, or mail a check to the address provided on your most recent tax return. You may also visit the “Get My Payment” webpage on the IRS website to check on the status of your payment and see your payment type.

Q: I am eligible for a stimulus payment based on the above conditions but have yet to receive it. Where can I find the status of my payment?

A: To check the current status of your stimulus payment, please visit the IRS website.

Q: I entered my information into the IRS Get My Payment website, and I have been told that my payment status is not available. Why is this?

A: According to the IRS’ Get My Payment FAQs page, the Get My Payment application will return "Payment Status Not Available" for several reasons, including:

  • You are required to file a tax return, but:
    • The IRS hasn’t finished processing your 2019 return.
    • The application doesn't yet have your data; the IRS is working on adding more data to allow more people to use it.
  • You don't usually file a return, and:
    • You used Non-Filers: Enter Payment Info Here, but the IRS hasn’t processed your entry yet.
    • You receive SSI or VA benefits; information has not been loaded onto the systems yet for people who don’t normally file a tax return.
  • You’re not eligible for a payment (see Eligibility).

The IRS updates Get My Payment data once per day, overnight, so there is no need to check more than once daily. If you are eligible for a payment, please check back for updates.


The Emergency Paid Sick Leave Act

Q: I am an active federal employee. Congress passed the Emergency Paid Sick Leave Act earlier this year. What does this new sick leave benefit mean for me? Do I qualify for it?

A: Approved in March as part of the Families First Coronavirus Response Act, the law provides federal employees with up to 80 hours of additional emergency paid sick leave for COVID-19-related circumstances occurring between April 1 and December 21, 2020. The Office of Personnel Management (OPM) published guidance detailing how agencies should implement the Emergency Paid Sick Leave Act.

Specifically, an employee qualifies for sick leave covering 100 percent of his or her pay (up to a limit of $511 per day) if s/he is unable to work (including unable to telework) because s/he: (1) is subject to a local, state, or federal COVID-19 quarantine or isolation order; (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or (3) is experiencing COVID-19 symptoms and seeking a medical diagnosis. An employee also qualifies for sick leave covering two-thirds of pay (up to a limit of $200 per day) if s/he is unable to work because s/he: (1) is caring for an individual who has been required or advised to quarantine or isolate; or (2) is caring for a child whose school or place of care has been closed. 


Reopening Federal Agencies

Q: Has the administration created a plan for reopening federal agencies?

A: Yes, the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) released guidance detailing the federal government’s plan to reopen federal agencies to the maximum extent possible in the wake of the COVID-19 crisis. The guidance offers a framework for agencies to reopen based on “gating criteria,” including infection rates, the number of documented cases in a state or county, and health care preparedness. Additionally, the federal government’s procedure for reopening will be consistent with the White House’s Opening Up America Again plan, which uses a similar transitional model for state and local governments.

Q: When my agency returns to normal operations, what should I expect and how should I prepare?

A: On April 23, OPM published FAQs regarding the resumption of normal workforce operations, including information about social distancing, face coverings, hygiene, telework and more. You can view the FAQs here.


Other Federal Guidance on COVID-19

Q: Where can I find the Office of Personnel Management’s (OPM) COVID-19 guidance?

A: OPM has created a landing page collecting all of the agency’s COVID-19-related guidance in one place.

Q: I am a telework-eligible federal employee with caregiving responsibilities. What options do I have?

A: OPM has published guidance for agencies detailing options for telework-eligible employees with caregiving responsibilities. You can access it here.

Q: Are federal employees who must travel to work subject to shelter-in-place orders?

A: According to OPM’s website, there are currently no restrictions on federal employees traveling to and from work stations.

Q: How do I protect myself from COVID-19? What should I do if I start feeling some symptoms of the virus?

A: To learn more about protecting yourself from COVID-19 and what steps you should take if you are sick, please visit the Center for Disease Control’s COVID-19 resource center here.


COVID-19 Emergency Financial Assistance for Federal Employees

Q: I need emergency financial assistance due to the COVID-19 pandemic. Where can I go?

A: The Federal Employee Education and Assistance fund (FEEA) created an emergency hardship loan program to assist federal employees and their families during times of hardship. For more information and to apply for a loan, visit the FEEA website here.


COVID-19 Response Related Federal Job Opportunities

Q: I am interested in federal employment opportunities related to the government’s COVID-19 response. Where can I find these?

A: USAJOBS, the federal government’s hiring website, has created a category of positions directly related to COVID-19 response efforts. This webpage collects in one place all open jobs related to the government’s coronavirus response.

Q: Are their reemployment opportunities available for federal annuitants at this time?

A: Yes, and the USAJOBS website can be used to identify those opportunities. Specifically, the Department of Veterans Affairs (VA) is looking to rehire retired physicians, nurses, pharmacists, laboratory technicians, respiratory therapists and other medical professionals. The VA has secured a dual compensation waiver from the Office of Personnel Management (OPM), meaning rehired annuitants will receive both their pension and a paycheck from their new role. You can find more information about reemployment opportunities here.

If you’re interested in learning more about what it means to return to federal service as a reemployed annuitant, watch the NARFE Federal Benefits Institute webinar on this topic here.


How NARFE Is Protecting Federal Employees and Retirees During the COVID-19 Crisis

Q: What has NARFE done to protect the federal community during the COVID-19 crisis?

A: NARFE has taken numerous steps to safeguard federal employees and retirees amid the coronavirus pandemic. NARFE pushed for provisions in the Coronavirus Aid, Relief and Economic Security (CARES) Act, passed into law in March, which allowed for the suspension of Required Minimum Distributions (RMDs) on retirement accounts in 2020. For more information, please see our RMD FAQs

In an April 14 letter, NARFE National President Ken Thomas urged the U.S. Secretary of Treasury to direct the IRS to expeditiously issue economic impact payments approved by the CARES Act to federal annuitants. To make the benefit as convenient as possible, NARFE asked the Treasury Secretary to work with the Office of Personnel Management (OPM) to automatically send stimulus payments to federal annuitants who do not receive Social Security benefits and did not file a tax return for the past two years. For more information, please see the stimulus payments FAQs section

On April 20, NARFE sent a letter to Congress calling for the prompt passing of legislation that would assist federal employees on the front lines of the COVID-19 crisis, including hazard pay, FEHB telehealth services, extending the Families First Coronavirus Response Act to all federal employees, and extending weather and safety leave to employees who cannot telework due to dependent care responsibilities. Furthermore, the letter asked lawmakers to provide the United States Postal Service, which is in an increasingly dire financial situation, with emergency appropriations and debt cancellation to keep the agency afloat. NARFE also joined with the Federal-Postal Coalition to send a similar letter to Congress in support of these provisions.

Q: How can I take action on COVID-19-related issues to help NARFE protect the federal community?

A: NARFE needs your help to save the U.S. Postal Service. Contact your legislators and urge them to support including provisions from the Protect Our Post Offices Act, H.R. 6425, in future COVID-19 relief packages. The legislation would distribute $25 billion in emergency funding to help the agency make up for lost revenue and provide masks and other personal protective equipment for its workers.

Q: Is NARFE still working to repeal or reform the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP)?

A: Yes, NARFE continues to lobby in support of GPO and WEP repeal or reform legislation amid the COVID-19 pandemic. Click here to view a letter NARFE National President Ken Thomas sent Congress. Visit NARFE’s Legislative Action Center to tell your legislators how WEP has impacted you, and urge them to support legislation that provides relief to all those affected.


Required Minimum Distributions Suspended for 2020

Q: I read that the Thrift Savings Plan (TSP) is suspending required minimum distributions (RMDs) for 2020. How do I suspend RMDs on my TSP account?

A: As authorized by the recently enacted Coronavirus Aid, Relief and Economic Security (CARES) Act, the TSP is temporarily making changes related to required minimum distributions to give TSP account balances time to recover from market turmoil.

The actions the TSP announced will have the following effects:

  • Participants do not need to make any withdrawals from their TSP accounts in 2020 to satisfy an RMD, regardless of age or employment status.
  • The TSP will not send any automatic RMD payments for 2020.
  • If a participant makes a withdrawal, the TSP will withhold money for federal taxes at the rate appropriate for the type of withdrawal made, without regard to RMD rules that would otherwise apply. Participants can transfer or roll over to an IRA or eligible employer plan any otherwise eligible withdrawals they make. (See the TSP tax notice Important Tax Information About Payments From Your TSP Account for more information about eligible rollover distributions.)

You can stop RMDs on your TSP account by submitting Form TSP-95 – “Changes to Installment Payments.” Begin this process online by selecting "Changes to Installment Payments" under www.tsp.gov/requestwithdrawal.

If you elect to stop your monthly payments, in the future you will not be able to resume receiving payments that are calculated based on your life expectancy. You may still elect to receive payments of a specific dollar amount. In future years, when RMD penalties are applicable, if your RMD is not satisfied by December, a supplemental payment will automatically be issued to you at the end of the year to ensure the remaining amount is satisfied. You will not be penalized if your RMD is satisfied in this way.

Note that if you would like to resume receiving installment payments after you have stopped them, you will have to make a new withdrawal election by submitting Form TSP-99 – “Withdrawal Request for Separated and Beneficiary Participants.” You must initiate this process via the previous link.

Q: Can already-issued 2020 RMD payments be redeposited?

A: Since RMDs do not apply to withdrawals in 2020, the distributions can be rolled over, back into the TSP or into an IRA. Although distributions typically must be rolled over within 60 days, there is an exception this year that allows any distributions received between February 1, 2020, and May 15, 2020, to be rolled over by July 15, 2020.

Q: What will happen if I stop my monthly payments now, and fail to restart them to satisfy RMD requirements in the future?

A: In future years, when RMD penalties are applicable, if your RMD is not satisfied by December, a supplemental payment will automatically be issued to you at the end of the year to ensure the remaining amount is satisfied. You will not be penalized if your RMD is satisfied in this way.

Note that if you would like to resume receiving installment payments after you have stopped them, you will have to make a new withdrawal election by submitting Form TSP-99 – “Withdrawal Request for Separated and Beneficiary Participants” at this link: www.tsp.gov/requestwithdrawal. If you would like your installment payments to resume in January 2021, we suggest that you submit your request in January 2021.

Q: How will the CARES Act impact qualified retirement plans and individual retirement accounts?

 

A: The CARES Act provides for increased access to funds in employer retirement plans for individuals impacted by the coronavirus. The relief is for qualified individuals who fit one or more of the below criteria:

  • Diagnosed with COVID-19 or SARS-CoV-2,
  • Has a spouse or dependent who is diagnosed with COVID-19 or SARS-CoV-2, or
  • Experiences adverse financial consequences because of a quarantine, work layoff or furlough, loss of childcare, or business closure due to COVID-19.

The eligibility for the special distributions may be expanded by the Secretary of the Treasury. 

Penalty Free Distributions and Delayed Tax Rules

The CARES Act states that distributions of up to $100,000 may be made from qualified retirement plans from January 1, 2020 through December 31, 2020 without being subject to the 10% penalty for early distributions; they will also not be subject to federal and state income tax withholding. The distributions may be repaid over three years and will be taxed over a three-year period to the extent the distributions are not repaid.

Expanded Loan Opportunities

The CARES Act also authorizes expanded loans from qualified plans for qualified individuals for the 180-day period following the date of enactment (March 18, 2020). The typical loan limit of the lesser of $50,000 or 50 percent of the participant’s vested account balance has been increased to the lesser of $100,000 or 100 percent of the participant’s vested account balance. In addition, if a qualified individual has a loan outstanding from a qualified plan, loan repayments may be delayed for one year. The plan loans will be reamortized to reflect the delayed repayments. 

Suspension of Minimum Distributions

For 2020, RMDs for those age 70½ or older are suspended for all individuals, not just qualified individuals. The suspension applies to required distributions from defined contribution plans such as 401k plans, tax deferred annuity contracts, governmental 457 plans and individual retirement accounts.

Please see the below links for more information from the TSP:

RMD Plan News item:

www.tsp.gov/whatsnew/Content/index.html#rmdchanges

RMD changes page:

www.tsp.gov/whatsnew/Content/coronavirus/rmd-changes.html

COVID portal page:

www.tsp.gov/whatsnew/Content/coronavirus/index.html

National Active and Retired

FEDERAL EMPLOYEES Association

NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

This is the only website that reflects the official opinions and positions of the National Active and Retired Federal Employees Association (NARFE). Opinions and/or positions that appear on any other site bearing NARFE's name or seal are not necessarily those of NARFE. Click here for Privacy Statement.   NARFE has been certified by Dun & Bradstreet.

The COVID-19 crisis is one rife with uncertainty. As such, NARFE is serving as the go-to resource for information about federal benefits, informing both federal retirees and employees of resources, policies, and laws that will benefit or affect them during the coronavirus pandemic. From stimulus payments to the Thrift Savings Plan (TSP) to guidance from the Office of Personnel Management (OPM), NARFE is here to help you navigate the latest developments. If you have any questions about the FAQs below, please contact the NARFE advocacy department at advocacy@narfe.org.

The Coronavirus Aid, Relief and Economic Security (CARES) Act Payments

The Emergency Paid Sick Leave Act

Reopening Federal Agencies

Other Federal Guidance on COVID-19

COVID-19 Emergency Financial Assistance for Federal Employees

COVID-19 Response Related Federal Job Opportunities

How NARFE Is Protecting Federal Employees and Retirees During the COVID-19 Crisis

Required Minimum Distributions Suspended for 2020


The Coronavirus Aid, Relief and Economic Security (CARES) Act Payments

Q: Am I eligible for a stimulus payment from the Coronavirus Aid, Relief and Economic Security (CARES) Act?

A: The CARES Act provides direct cash payments of $1,200 per adult ($2,400 for a married couple), and $500 per child. Both retirees and workers (or those unemployed) are eligible for the payments. The only individuals excluded from receiving payment are nonresident aliens and those claimed as a dependent on someone else’s tax returns.

The cash payments get smaller or are eliminated for those with higher incomes, phasing out at a rate of $5 for every additional $100 in income above the following thresholds: $75,000 in adjusted gross income for single filers, $112,500 for heads of household and $150,000 for married couples filing jointly. This phase-out would be based on adjusted gross income as reported on 2019 tax returns, or 2018 returns if the taxpayer has not yet filed their 2019 taxes

Individuals who receive Social Security or railroad retirement benefits who also did not file a tax return for 2018 or 2019 will automatically receive a stimulus payment (if eligible based on income). However, federal annuitants who did not file a tax return in 2018 or 2019 and who do not collect a Social Security benefit are not currently eligible to receive stimulus payments automatically. If this applies to you, visit the IRS website and enter your information to receive payment.

The IRS will send the payment via direct deposit, if the bank information is available, or mail a check to the address provided on your most recent tax return. You may also visit the “Get My Payment” webpage on the IRS website to check on the status of your payment and see your payment type.

Q: I am eligible for a stimulus payment based on the above conditions but have yet to receive it. Where can I find the status of my payment?

A: To check the current status of your stimulus payment, please visit the IRS website.

Q: I entered my information into the IRS Get My Payment website, and I have been told that my payment status is not available. Why is this?

A: According to the IRS’ Get My Payment FAQs page, the Get My Payment application will return "Payment Status Not Available" for several reasons, including:

  • You are required to file a tax return, but:
    • The IRS hasn’t finished processing your 2019 return.
    • The application doesn't yet have your data; the IRS is working on adding more data to allow more people to use it.
  • You don't usually file a return, and:
    • You used Non-Filers: Enter Payment Info Here, but the IRS hasn’t processed your entry yet.
    • You receive SSI or VA benefits; information has not been loaded onto the systems yet for people who don’t normally file a tax return.
  • You’re not eligible for a payment (see Eligibility).

The IRS updates Get My Payment data once per day, overnight, so there is no need to check more than once daily. If you are eligible for a payment, please check back for updates.


The Emergency Paid Sick Leave Act

Q: I am an active federal employee. Congress passed the Emergency Paid Sick Leave Act earlier this year. What does this new sick leave benefit mean for me? Do I qualify for it?

A: Approved in March as part of the Families First Coronavirus Response Act, the law provides federal employees with up to 80 hours of additional emergency paid sick leave for COVID-19-related circumstances occurring between April 1 and December 21, 2020. The Office of Personnel Management (OPM) published guidance detailing how agencies should implement the Emergency Paid Sick Leave Act.

Specifically, an employee qualifies for sick leave covering 100 percent of his or her pay (up to a limit of $511 per day) if s/he is unable to work (including unable to telework) because s/he: (1) is subject to a local, state, or federal COVID-19 quarantine or isolation order; (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or (3) is experiencing COVID-19 symptoms and seeking a medical diagnosis. An employee also qualifies for sick leave covering two-thirds of pay (up to a limit of $200 per day) if s/he is unable to work because s/he: (1) is caring for an individual who has been required or advised to quarantine or isolate; or (2) is caring for a child whose school or place of care has been closed. 


Reopening Federal Agencies

Q: Has the administration created a plan for reopening federal agencies?

A: Yes, the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) released guidance detailing the federal government’s plan to reopen federal agencies to the maximum extent possible in the wake of the COVID-19 crisis. The guidance offers a framework for agencies to reopen based on “gating criteria,” including infection rates, the number of documented cases in a state or county, and health care preparedness. Additionally, the federal government’s procedure for reopening will be consistent with the White House’s Opening Up America Again plan, which uses a similar transitional model for state and local governments.

Q: When my agency returns to normal operations, what should I expect and how should I prepare?

A: On April 23, OPM published FAQs regarding the resumption of normal workforce operations, including information about social distancing, face coverings, hygiene, telework and more. You can view the FAQs here.


Other Federal Guidance on COVID-19

Q: Where can I find the Office of Personnel Management’s (OPM) COVID-19 guidance?

A: OPM has created a landing page collecting all of the agency’s COVID-19-related guidance in one place.

Q: I am a telework-eligible federal employee with caregiving responsibilities. What options do I have?

A: OPM has published guidance for agencies detailing options for telework-eligible employees with caregiving responsibilities. You can access it here.

Q: Are federal employees who must travel to work subject to shelter-in-place orders?

A: According to OPM’s website, there are currently no restrictions on federal employees traveling to and from work stations.

Q: How do I protect myself from COVID-19? What should I do if I start feeling some symptoms of the virus?

A: To learn more about protecting yourself from COVID-19 and what steps you should take if you are sick, please visit the Center for Disease Control’s COVID-19 resource center here.


COVID-19 Emergency Financial Assistance for Federal Employees

Q: I need emergency financial assistance due to the COVID-19 pandemic. Where can I go?

A: The Federal Employee Education and Assistance fund (FEEA) created an emergency hardship loan program to assist federal employees and their families during times of hardship. For more information and to apply for a loan, visit the FEEA website here.


COVID-19 Response Related Federal Job Opportunities

Q: I am interested in federal employment opportunities related to the government’s COVID-19 response. Where can I find these?

A: USAJOBS, the federal government’s hiring website, has created a category of positions directly related to COVID-19 response efforts. This webpage collects in one place all open jobs related to the government’s coronavirus response.

Q: Are their reemployment opportunities available for federal annuitants at this time?

A: Yes, and the USAJOBS website can be used to identify those opportunities. Specifically, the Department of Veterans Affairs (VA) is looking to rehire retired physicians, nurses, pharmacists, laboratory technicians, respiratory therapists and other medical professionals. The VA has secured a dual compensation waiver from the Office of Personnel Management (OPM), meaning rehired annuitants will receive both their pension and a paycheck from their new role. You can find more information about reemployment opportunities here.

If you’re interested in learning more about what it means to return to federal service as a reemployed annuitant, watch the NARFE Federal Benefits Institute webinar on this topic here.


How NARFE Is Protecting Federal Employees and Retirees During the COVID-19 Crisis

Q: What has NARFE done to protect the federal community during the COVID-19 crisis?

A: NARFE has taken numerous steps to safeguard federal employees and retirees amid the coronavirus pandemic. NARFE pushed for provisions in the Coronavirus Aid, Relief and Economic Security (CARES) Act, passed into law in March, which allowed for the suspension of Required Minimum Distributions (RMDs) on retirement accounts in 2020. For more information, please see our RMD FAQs

In an April 14 letter, NARFE National President Ken Thomas urged the U.S. Secretary of Treasury to direct the IRS to expeditiously issue economic impact payments approved by the CARES Act to federal annuitants. To make the benefit as convenient as possible, NARFE asked the Treasury Secretary to work with the Office of Personnel Management (OPM) to automatically send stimulus payments to federal annuitants who do not receive Social Security benefits and did not file a tax return for the past two years. For more information, please see the stimulus payments FAQs section

On April 20, NARFE sent a letter to Congress calling for the prompt passing of legislation that would assist federal employees on the front lines of the COVID-19 crisis, including hazard pay, FEHB telehealth services, extending the Families First Coronavirus Response Act to all federal employees, and extending weather and safety leave to employees who cannot telework due to dependent care responsibilities. Furthermore, the letter asked lawmakers to provide the United States Postal Service, which is in an increasingly dire financial situation, with emergency appropriations and debt cancellation to keep the agency afloat. NARFE also joined with the Federal-Postal Coalition to send a similar letter to Congress in support of these provisions.

Q: How can I take action on COVID-19-related issues to help NARFE protect the federal community?

A: NARFE needs your help to save the U.S. Postal Service. Contact your legislators and urge them to support including provisions from the Protect Our Post Offices Act, H.R. 6425, in future COVID-19 relief packages. The legislation would distribute $25 billion in emergency funding to help the agency make up for lost revenue and provide masks and other personal protective equipment for its workers.

Q: Is NARFE still working to repeal or reform the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP)?

A: Yes, NARFE continues to lobby in support of GPO and WEP repeal or reform legislation amid the COVID-19 pandemic. Click here to view a letter NARFE National President Ken Thomas sent Congress. Visit NARFE’s Legislative Action Center to tell your legislators how WEP has impacted you, and urge them to support legislation that provides relief to all those affected.


Required Minimum Distributions Suspended for 2020

Q: I read that the Thrift Savings Plan (TSP) is suspending required minimum distributions (RMDs) for 2020. How do I suspend RMDs on my TSP account?

A: As authorized by the recently enacted Coronavirus Aid, Relief and Economic Security (CARES) Act, the TSP is temporarily making changes related to required minimum distributions to give TSP account balances time to recover from market turmoil.

The actions the TSP announced will have the following effects:

  • Participants do not need to make any withdrawals from their TSP accounts in 2020 to satisfy an RMD, regardless of age or employment status.
  • The TSP will not send any automatic RMD payments for 2020.
  • If a participant makes a withdrawal, the TSP will withhold money for federal taxes at the rate appropriate for the type of withdrawal made, without regard to RMD rules that would otherwise apply. Participants can transfer or roll over to an IRA or eligible employer plan any otherwise eligible withdrawals they make. (See the TSP tax notice Important Tax Information About Payments From Your TSP Account for more information about eligible rollover distributions.)

You can stop RMDs on your TSP account by submitting Form TSP-95 – “Changes to Installment Payments.” Begin this process online by selecting "Changes to Installment Payments" under www.tsp.gov/requestwithdrawal.

If you elect to stop your monthly payments, in the future you will not be able to resume receiving payments that are calculated based on your life expectancy. You may still elect to receive payments of a specific dollar amount. In future years, when RMD penalties are applicable, if your RMD is not satisfied by December, a supplemental payment will automatically be issued to you at the end of the year to ensure the remaining amount is satisfied. You will not be penalized if your RMD is satisfied in this way.

Note that if you would like to resume receiving installment payments after you have stopped them, you will have to make a new withdrawal election by submitting Form TSP-99 – “Withdrawal Request for Separated and Beneficiary Participants.” You must initiate this process via the previous link.

Q: Can already-issued 2020 RMD payments be redeposited?

A: Since RMDs do not apply to withdrawals in 2020, the distributions can be rolled over, back into the TSP or into an IRA. Although distributions typically must be rolled over within 60 days, there is an exception this year that allows any distributions received between February 1, 2020, and May 15, 2020, to be rolled over by July 15, 2020.

Q: What will happen if I stop my monthly payments now, and fail to restart them to satisfy RMD requirements in the future?

A: In future years, when RMD penalties are applicable, if your RMD is not satisfied by December, a supplemental payment will automatically be issued to you at the end of the year to ensure the remaining amount is satisfied. You will not be penalized if your RMD is satisfied in this way.

Note that if you would like to resume receiving installment payments after you have stopped them, you will have to make a new withdrawal election by submitting Form TSP-99 – “Withdrawal Request for Separated and Beneficiary Participants” at this link: www.tsp.gov/requestwithdrawal. If you would like your installment payments to resume in January 2021, we suggest that you submit your request in January 2021.

Q: How will the CARES Act impact qualified retirement plans and individual retirement accounts?

 

A: The CARES Act provides for increased access to funds in employer retirement plans for individuals impacted by the coronavirus. The relief is for qualified individuals who fit one or more of the below criteria:

  • Diagnosed with COVID-19 or SARS-CoV-2,
  • Has a spouse or dependent who is diagnosed with COVID-19 or SARS-CoV-2, or
  • Experiences adverse financial consequences because of a quarantine, work layoff or furlough, loss of childcare, or business closure due to COVID-19.

The eligibility for the special distributions may be expanded by the Secretary of the Treasury. 

Penalty Free Distributions and Delayed Tax Rules

The CARES Act states that distributions of up to $100,000 may be made from qualified retirement plans from January 1, 2020 through December 31, 2020 without being subject to the 10% penalty for early distributions; they will also not be subject to federal and state income tax withholding. The distributions may be repaid over three years and will be taxed over a three-year period to the extent the distributions are not repaid.

Expanded Loan Opportunities

The CARES Act also authorizes expanded loans from qualified plans for qualified individuals for the 180-day period following the date of enactment (March 18, 2020). The typical loan limit of the lesser of $50,000 or 50 percent of the participant’s vested account balance has been increased to the lesser of $100,000 or 100 percent of the participant’s vested account balance. In addition, if a qualified individual has a loan outstanding from a qualified plan, loan repayments may be delayed for one year. The plan loans will be reamortized to reflect the delayed repayments. 

Suspension of Minimum Distributions

For 2020, RMDs for those age 70½ or older are suspended for all individuals, not just qualified individuals. The suspension applies to required distributions from defined contribution plans such as 401k plans, tax deferred annuity contracts, governmental 457 plans and individual retirement accounts.

Please see the below links for more information from the TSP:

RMD Plan News item:

www.tsp.gov/whatsnew/Content/index.html#rmdchanges

RMD changes page:

www.tsp.gov/whatsnew/Content/coronavirus/rmd-changes.html

COVID portal page:

www.tsp.gov/whatsnew/Content/coronavirus/index.html

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National Active and Retired Federal Employees Association



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NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

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