IRS provides RMD rollover extensions - Spidell

IRS provides RMD rollover extensions


All taxpayers who have taken a required minimum distribution (RMD) in 2020 (including those taken in January and February), from an eligible retirement account, now have the opportunity to roll those funds back into a retirement account by August 31, 2020. (IRS Notice 2020-51)

The CARES Act provides that taxpayers with an RMD requirement due in 2020 from a defined contribution plan, including a §401(k) or §403(b) plan, or an IRA, may skip those RMDs in 2020. The 2020 RMD suspension includes anyone who turned age 70½ in 2019 and would have had to take their first RMD by April 1, 2020. The 2020 RMD suspension does not apply to defined benefit plans.

However, prior to Notice 2020-51, taxpayers could roll their RMDs back into a retirement account by July 15, 2020, but only if the 60-day rollover deadline fell between April 1, 2020, and July 15, 2020.

Notice 2020-51 also clarifies that the one rollover per 12-month period limitation does not apply to 2020 RMDs that are recontributed to retirement accounts by August 31, 2020.

In addition to the items above, Notice 2020-51 provides:

  • Questions and answers to various RMD issues for 2020; and
  • A sample plan amendment that, if adopted, would provide participants a choice whether to receive waived RMDs and certain related payments.

The full text of the notice can be found at:

www.irs.gov/pub/irs-drop/n-20-51.pdf

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