IRS Provides Guidance on CARES Act Waiver of Required Minimum DistributionsJune 26, 2020
On June 23, 2020 IRS released updated guidance in regard to Required Minimum Distributions (RMD) for 2020.
Specifically, Notice 2020-51 provides rollover relief (including an extension of the 60-day rollover period to August 31, 2020), permits certain repayments to inherited IRAs, and sets out Q&As regarding the waiver of 2020 RMDs.
The Notice allows taxpayers who receive certain distributions to roll them into an eligible retirement plan (even if the distribution normally would be treated as part of a series of substantially equal periodic payments).
The Notice also provides that, in the case of an IRA owner or beneficiary who has already received a distribution of an amount that would have been an RMD in 2020 but for the CARES Act or the SECURE Act, the recipient may repay the distribution to the distributing IRA, even if the repayment is after the 60-day rollover deadline, provided the repayment is made no later than August 31, 2020. According to the Notice, any repayment will be treated as a rollover for purposes of excluding the RMD from income, but will not be counted as a rollover for purposes of the one rollover per 12-month period limitation or the restriction on rollovers for non-spousal beneficiaries.
For example, if a participant received a single-sum distribution in January 2020, part of which was treated as ineligible for rollover because it was considered an RMD, that participant will have until August 31, 2020 to roll over that part of the distribution.
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