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IRS Changes Rule to RMDs

July 13, 2020

Under the CARES Act, the requirement to take your required minimum distribution (RMD) for 2020 was temporarily suspended, but limited the non-penalty repayment to those who already took their RMD between a limited number of days (60 days before the CARES Act was enacted).  This left anyone who took their RMD in the first three weeks of January unable to benefit from the tax savings.  Basically, if you had taken your 2020 RMD between the end of January and the end of March, you could return the money to your IRA or other retirement account with no penalty, thereby lowering your income tax hit for 2020.

On June 23, 2020, the IRS issued Notice 2020-51.

Notice 2020-51 extends this 60-day rollover deadline for distributions that would have been considered RMDs absent the temporary suspension provided by the CARES Act. The deadline to roll over (return) distributions of this type is extended to until at least August 31, 2020. For example, an individual who took an RMD from an IRA in early January 2020 has until August 31, 2020 to return the money to the IRA as a tax-free rollover.  These rollovers (or returns) may be made to the same or different IRA. 

With this, as with ALL legal matters, you are strongly advised to speak with an attorney.

For questions or assistance, contact the Law Offices of Katharine J. Richards, P.C.
at (516) 505-1780 or e-mail Info@KJRichardsLaw.com.