provide loans to participants . The amount of a retirement plan loan is taxed as though an actual distribution occurred , including the 10 % early withdrawal tax , unless certain requirements are met .
The requirements include , among others , that ( 1 ) the loan amount must not exceed the lesser of 50 % of the participant ’ s account balance or $ 50,000 , and ( 2 ) the loan ’ s terms must provide for a repayment period of not more than five years .
The CARES Act expands the availability of retirement plan loans by providing that for COVID-19 related loans the maximum loan amount is the lesser of the present value of the nonforfeitable accrued benefit of the employee under the plan or $ 100,000 . The loan needed to be made during the 180-day period beginning on the date of enactment of the CARES Act , March 27 , 2020 . The definition of coronavirus related for loans is the same as the definition under the rules for coronavirus related distributions from retirement plans .
Additionally , the CARES Act provides that the due date for any loan repayment is delayed for one year if the due date would fall during the period from the CARES Act enactment date to December 31 , 2020 for a qualified individual with an outstanding loan on or after the date of enactment .
Federal and Georgia Tax Law . Georgia follows federal law for tax year 2019 and beyond , as it existed on March 27 , 2020 , the enactment date of the CARES Act . That includes the amendments made by the CARES Act . However , Georgia decoupled from certain CARES Act provisions , including the amendments to IRC § 172 , which are the amendments to net operating loss rules . 10
Temporary Waiver of Required Minimum Distribution Rules . 11 Minimum distribution rules were waived for calendar year 2020 for IRAs and certain employer-provided qualified retirement plans . The next required minimum distributions for the plans will be for 2021 . The 2020 minimum distribution requirement is waived for both lifetime distributions and after-death distributions . In the case of an individual who dies and whose interest is required to be distributed within five years , the five-year period is determined without regard to calendar year 2020 .
Moving Out of State . The effect of COVID-19 on tax is not limited to tax law changes . During the pandemic , some people moved temporarily to another state . They might be liable for tax in the new state even though the move is temporary .
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1
U . S . Department of The Treasury , The Treasury Department is Delivering COVID-19 Relief for All Americans , https :// home . treasury . gov / policy-issues / cares ( last visited February 25 , 2021 , 11:45 pm ).
2
I . R . C . § 62 ( 2020 ), see Covid-related Tax Relief Act § 212 .
3
I . R . C . § 162 ( 2020 ), Covid-related Tax Relief Act § 276 .
4
Internal Revenue Service , Special Issues for Employees , https :// www . irs . gov / newsroom / special-issues-foremployees ( last updated January 28 , 2021 ). ⁵I . R . C . § 139 ( 2020 ). ⁶Internal Revenue Service , Recovery Rebate Credit , https :// www . irs . gov / newsroom / recovery-rebate-credit ( last visited February 25 , 2021 , 11:47 pm ) ⁷I . R . C . §§ 6248-6248A ( 2020 ). ⁸Coronavirus Aid , Relief , And Economic Security Act of 2020 § 2202 ( a ) ( 2020 ). ⁹Coronavirus Aid , Relief , And Economic Security Act of 2020 § 2202 ( b ) ( 2020 ).
10
Georgia Department of Revenue , Income Tax Federal Tax Changes , https :// dor . georgia . gov / rules-policies / income-tax / income-tax-federal-tax-changes ( last updated February 25 , 2021 ).
11
Coronavirus Aid , Relief , And Economic Security Act of 2020 § 2203 , I . R . C . § 401 ( 2020 ).
References : Bloomberg Tax & Accounting , Federal Tax & Accounting – Coronavirus Roadmap ( 2020 ). Bloomberg Tax & Accounting , State Conformity to CARES Act – Coronavirus Roadmap ( 2021 ). Kerry Breen , 5 Ways COVID-19 Could Affect Your Tax Return , Today ( February 8 , 2021 , 4:53 PM ) https :// www . today . com / money / 5-ways-your-tax-returnsmight-be-different-2021-today-t208388 . Staff of the Joint Committee on Taxation , JCX-12R-20 , Description of The Tax Provisions Of Public Law 116-136 , The Coronavirus Aid , Relief , And Economic Security (“ CARES ”) Act ( 2020 ).
MURRAY SAYLOR The Saylor Law Firm , LLP Msaylor @ saylorlaw . com
IN THE PROFESSION
HE " JERRY " ZHANG The Saylor Law Firm , LLP Jzhang @ saylorlaw . com
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Most everyone has spent a significant amount of time working from home since March of 2020 . Does that have an effect on our taxes ? It could , but perhaps not as much as one might think .
How do you calculate your home office deduction ?
Many lawyers spent at least nine months working from home during 2020 . Does that mean part of our home will qualify as a home office ?
In order for your home to qualify as a home office , you must use a designated area exclusively and regularly as your principal place of business in connection with your trade or business . This requirement is set out in section 280A ( c ) of the Internal Revenue Code of 1986 , as now or hereafter amended ( the “ Code ”). It may include where you meet exclusively and regularly with patients , clients , or customers in the normal course of your trade or business . It may also include a separate structure on your property , whether owned or rented and whether attached or not , that is regularly and exclusively used in connection with your trade or business . For an employee , the business use of a portion of a home applies only if it “ is for the convenience of his employer .” Being required to work remotely during the pandemic will hopefully fulfill this requirement . You must use the specific area for your business on a regular basis — not incidentally or occasionally . Just using your home for an activity in which you
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