REMINDER: Required Minimum Distributions From Retirement Plans Are Waived for 2020
And, if you already received one, you can replace it.Anchin AlertJuly 1, 2020
One of the many provisions of the “CARES” Act is that required minimum distributions (RMDs) from retirement plans are waived for the 2020 tax year. RMDs usually impact those who were at least 70 ½ years of age at the end of 2019, or who will be at least 72 years of age at the end of 2020. It can also impact younger persons who have inherited a retirement plan, such as an IRA, from a decedent.
If you normally receive an RMD, you should evaluate whether you are in a financial position to consider forgoing it this year. This can preserve your assets on a tax-deferred basis for an additional year.
But, what if you received an RMD before the CARES Act was passed in March, or even after that point?
The law now provides that you can choose to replace (“roll over”) a 2020 RMD without penalty within sixty days or through August 31, 2020, whichever is later. The funds need not be rolled over into the same account from which they were distributed, and no income tax will be due on the original distribution.
Additionally, the usual rule limiting rollovers to one per year is waived for this purpose.
Rules governing retirement plans and RMDs are complex. Please contact your Anchin Relationship Partner if you would like to review your own situation prior to making a decision.