51A. Recontributions

Statement of Requirement: Code § 72(t)(2)(H)(v); CARES Act sec. 2202(a)(3); Notice 2020-50, 2020-28 I.R.B. 35; Notice 2020-68, 2020-38 I.R.B. 567

Sample Plan Language:

Recontributions of Qualified Birth or Adoption Distributions

A Participant who received one or more Qualified Birth or Adoption Distributions under the Plan is entitled to recontribute the distributions (not to exceed the amount of the distributions) at any time during the 3-year period beginning on the day after the date on which such distribution was received, in the case of distributions made after December 29, 2022, or at any time after such distribution and before January 1, 2026, in the case of distributions made on or before December 22, 2022, if the Participant is eligible to make a rollover contribution to the Plan at the time of recontribution. A Participant who makes a recontribution to the Plan will be treated as having received the distributions in an eligible rollover distribution and as having transferred the amount to the Plan in a direct trustee-to-trustee transfer within 60 days of the distribution.

(Note to reviewer: A plan that permits a Qualified Birth or Adoption Distribution as provided in CODA LRM XVI (Distribution Limitations) must accept a repayment of the Qualified Birth or Adoption Distribution (QBAD) made under the Plan if the individual making the recontribution is eligible to make a rollover at the time of repayment. Section 311 of the SECURE 2.0 Act of 2022 amended § 72(t)(2)(H)(v)(I) to limit the recontribution period associated with QBADs to three years beginning on the day after the date on which such distribution was received.)

Recontributions of Coronavirus-Related Distributions

If elected by the employer in the Adoption Agreement, a Participant who is a qualified individual under section 2202(a)(4)(A)(ii) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Pub. L. 116-136, and Section 1B of Notice 2020-50, and who receives a coronavirus-related distribution that is eligible for tax-free rollover treatment may recontribute all or a portion of the coronavirus-related distribution at any time during the 3-year period beginning the day after the date of a coronavirus-related distribution made under the Plan. The recontribution of a coronavirus-related distribution that is eligible for tax-free rollover treatment and made within the 3-year period described above will be treated as a rollover contribution to the Plan.

(Note to reviewer: A plan is not required to provide a coronavirus-related distribution or accept a recontribution of a coronavirus-related distribution that is eligible for tax-free rollover treatment. The Administrator of a Plan that accepts

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recontributions of coronavirus-related distributions must reasonably conclude that the recontribution is eligible for Direct Rollover treatment.)

Recontributions of Qualified Disaster-Recovery Distributions

A Participant who received one or more Qualified Disaster Recovery Distributions under the Plan is entitled to recontribute the distributions (not to exceed the amount of the distributions) at any time during the 3-year period beginning on the day after the date on which such distribution was received if the Participant is eligible to make a rollover contribution to the Plan at the time of recontribution. A Participant who makes a recontribution to the Plan will be treated as having received the distributions in an eligible rollover distribution and as having transferred the amount to the Plan in a direct trustee-to-trustee transfer within 60 days of the distribution.

(Note to reviewer: A plan that permits a Qualified Disaster Recovery Distribution as provided in CODA LRM XVI (Distribution Limitations) must accept a repayment of the Qualified Disaster Recovery Distribution made under the Plan if the individual making the recontribution is eligible to make a rollover at the time of repayment. Section 331 of the SECURE 2.0 Act of 2022 added §§ 72(t)(2)(M) and 72(t)(11) to provide tax-favored treatment, including exemption from the 10% additional tax and the right to repay the distribution, for qualified disaster recovery distributions up to $22,000.)

Recontribution of Distributions by Terminally Ill Participants

A Participant who received one or more distributions under the Plan on or after the date the Participant was certified by a physician as having a terminal illness that can reasonably be expected to result in death within 84 months of the certification may recontribute the distribution(s) (not to exceed the amount of the distributions) at any time during the 3-year period beginning on the day after the date on which such distribution was received if the Participant is eligible to make a rollover contribution to the Plan at the time of recontribution. A Participant who makes a recontribution to the Plan will be treated as having received the distributions in an eligible rollover distribution and as having transferred the amount to the Plan in a direct trustee-to-trustee transfer within 60 days of the distribution.

(Note to reviewer: A plan that makes distributions to a terminally ill participant, as that term is defined in Code § 72(t)(2)(L), must accept a repayment of the distribution if the individual making the recontribution is eligible to make a rollover at the time of repayment. See Q&A F-9 of Notice 2024-2. See also CODA LRM XVI.)

Recontributions of Emergency Personal Expense Distributions

A Participant who received one or more distributions on account of an Emergency

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Personal Expense under the Plan is entitled to recontribute the distribution(s) (not to exceed the amount of the distributions) at any time during the 3-year period beginning on the day after the date on which such distribution was received if the Participant is eligible to make a rollover contribution to the Plan at the time of recontribution. A Participant who makes a recontribution to the Plan will be treated as having received the distribution on account of an emergency personal expense in an eligible rollover distribution and as having transferred the amount to the Plan in a direct trustee-to-trustee transfer within 60 days of the distribution.

(Note to reviewer: A plan that provides for Emergency Personal Expense Distributions as provided in CODA LRM XVI (Distribution Limitations) must accept a repayment of the distribution if the individual making the recontribution is eligible to make a rollover at the time of repayment. Section 115 of the SECURE 2.0 Act of 2022 added §§ 72(t)(2)(I)(vi) to allow for repayment of Emergency Personal Expense Distributions as well as exemption from the 10% additional tax.)

Sample Adoption Agreement Language:

The employer [ ] will [ ] will not accept a recontribution of a coronavirus related distribution.