IRS Extends Deadline for IRAs to Adopt SECURE 2.0 Amendments

The IRS extended by one year the deadline to update an individual retirement account to adopt SECURE 2.0 amendments, providing the relief after providers asked for additional time.

Stakeholders and administrators of IRAs, Simplified Employee Pension plans, and Savings Incentive Match Plan for Employees IRA plans have until the end of 2027 to make the necessary amendments authorized by the SECURE 2.0 Act of 2022. For purposes of this IRS notice, the term IRA applies to both an individual retirement account described in Section 408(a) or (h) of the Internal Revenue Code and an individual retirement annuity described in Section 408(b), the agency stated.

The IRS notice stated that the deadline extension is needed, in part, “Because the Treasury Department and the IRS are still developing model language that may be used by IRA trustees, custodians, and issuers to amend an IRA for compliance with the Acts.”

The notice also stated that the decision to extend the deadline reflected concerns shared by providers that they need more time to make the necessary adjustments.

The compliance deadline changes affect provisions enacted in: the Setting Every Community Up for Retirement Enhancement Act of 2019, the CARES Act (Sections 2202 and 2203), the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Section 302) and the SECURE 2.0 Act of 2022.

Congress enacted the CARES Act provisions in 2020 to help retirement savers access funds during the pandemic. Section 2202 allowed affected individuals to withdraw up to $100,000 from retirement plans and IRAs without the standard 10% early-withdrawal penalty. Individuals could spread the taxable income over three years of tax reporting and repay the distributions within that period. The provision also temporarily raised IRA loan limits and delayed loan repayments.

Section 2203 waived required minimum distributions for 2020 across defined contribution plans and IRAs, including distributions otherwise required for beneficiaries.

Section 302 of the 2020 tax law extended similar relief to individuals affected by federally declared disasters. It authorized penalty-free disaster-related distributions, allowed multi-year income recognition and permitted recontribution of withdrawn amounts. Like the CARES Act, it increased loan limits and delayed repayments—but applied these benefits to disasters beyond the pandemic.

Though these provisions were temporary and often optional, plan providers that used them must still amend their governing documents.

The IRS maintained it may further extend the deadline for the amendments if it is deemed necessary.