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Required Minimum Distribution Relief for 2020

If you are over 70 and 1/2 and have a retirement plan, you most likely have been receiving Required Minimum Distributions (RMD) from that plan.  Thanks to recent law changes, you may be able to reinvest those distributions in your plan in 2020.

Prior rules required plans to make required minimum distributions (RMD) beginning April 1st of the year following the date on which the employee or retiree turned 70 and 1/2.  (The SECURE Act, passed in December of 2019, increased the age to 72 and allows traditional IRA owners to continue making contributions at any age.)

The recent CARES Act enabled 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, to 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 (i.e. pensions).

The Internal Revenue Service has just announced "that anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account following 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."

"In addition to the rollover opportunity, 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. The notice provides that this repayment is not subject to the one rollover per 12-month period limitation and the restriction on rollovers for inherited IRAs."

Fire Relief Information for Wineries

Extended tax filing deadlines may apply. https://www.bdcocpa.com/resources/articles/137

Please reach out if we can help you in any way!  

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