IRS Update on Required Minimum Distributions

CARES Act enables taxpayers to roll funds back into retirement accounts

The Coronavirus Aid, Relief, and Economic Security (CARES) Act enabled any taxpayer with required minimum distributions (RMD) due in 2020 from a retirement plan to forgo the RMD this year. This included 401(k), 403(b), and IRA plans. The IRS released Notice 2020-51, which states that anyone who already took an RMD in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account.

Below are a few key takeaways from the notice:

• The 60-day rollover period for any required minimum distributions already taken this year has been extended to            August 31, 2020.
• No IRA amendments are required in order to utilize the 2020 RMD waiver.
• The 2020 RMD waiver does not change an individual’s RMD “required beginning date.”
• The IRA 2020 RMD repayment opportunity with rollover treatment is available to both IRA owners and beneficiaries of inherited IRAs.
• A 2020 RMD is also waived for an individual whose “required beginning date” is April 1, 2021.
• Distributions from a plan may be rolled back into the same plan.

Please contact us if you have any questions, concerns, or need advisement during this unprecedented time. You can also check our Coronavirus Resources Page for more updates.