Employee Plan Loan
A loan from a qualified plan isn’t treated as a taxable distribution if it is:
(1) Repaid within five years (except for certain home loans), and
(2) Does not exceed the lesser of:
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$50,000 ($100,000 for loans 3/27/20 – 12/31/20), or
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The greater of:
i. ½ of the nonforfeitable accrued benefit in the plan (the present value of the nonforfeitable accrued benefit of the employee under the plan for loans 3/27/20 – 12/31/20), or
ii. $10,000.
The plan loan must be amortized in substantially level payments, at least quarterly, over the term of the loan. The level amortization requirement does not apply while an employee is on leave without pay for up to one year. (Code Sec 72(p)(2))