Accountants + Business Advisors

IRS Releases Notice Extending Repayment of Already Taken Required Minimum Distributions until Aug. 31, 2020

6.25.20

IRS Releases Notice Extending Repayment of Already Taken Required Minimum Distributions until Aug. 31, 2020

June 25, 2020

In IRS Notice 2020-51, the IRS announced that anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts can take advantage of the CARES Act RMD waiver for 2020. The 60-day rollover period for any RMDs already taken this year has been extended to August 31, 2020, to give taxpayers time to take advantage of this opportunity. Additionally, the Notice answers questions regarding the waiver of RMDs for 2020 under the Coronavirus Aid, Relief, and Economic Security Act, (CARES ). Under CARES, any taxpayer with an RMD due in 2020 from a defined-contribution retirement plan, including a 401(k) or 403(b) plan, or an IRA, may skip those RMDs this year. This includes anyone who turned age 70 1/2 in 2019 and would have had to take the first RMD by April 1, 2020. This waiver does not apply to defined-benefit plans. Now, an IRA owner or beneficiary who has already received a distribution from an IRA of an amount that would have been an RMD in 2020 can repay the distribution to the IRA by August 31, 2020. Critically important is that this repayment is not subject to the one rollover per 12-month period limitation and the restriction on rollovers for inherited IRAs.

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