dmertz
Level 15

Retirement tax questions

The CARES Act does not require the plan to permit a delay in the repayment of the loan.  If the plan permits the delay in repayment, the loan is still in effect.  If the plan does not permit the delay in repayment, the result should have been an offset distribution since the loan was not in default when you left service with this employer.

 

If the result was an offset distribution in 2020, the plan would have reduced the balance to your credit in the 401(k), issued a code Form 1099-R with codes 1 and M (I assume that you are under age 59½) and you have until the due date of your 2020 tax return, including extensions, to come up with the money and roll over the offset distribution.  To come up with the money, perhaps you could roll the remaining balance in the old employer's plan over to the new employer's plan and take a loan from the new employer's plan.  The rollover could be to an IRA or to your new employer's plan.