Additional Guidelines for Unwanted RMD's under the CARES Act

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On June 23, 2020 the IRS released additional guidelines on the waiver of 2020 Required Minimum Distributions (RMD’s). 

Owners of Traditional IRAs, Inherited IRAs, 401(k)s, 403(b)s, and other retirement plans who are currently taking RMD’s were provided relief through the CARES Act of March 27, 2020, to forego unwanted required distributions. Many retirement account owners had already taken some or all of their 2020 RMD’s and were given the option to "undo" or roll back those distributions into their retirement accounts. The initial guidelines from the IRS posed several questions in regards to making these rollovers. They have now expanded the guidelines involving these issues with the changes outlined below.  

  1. All required minimum distributions that have already been taken for 2020 are eligible to be rolled back into a retirement account. Previously:

    1. Only distributions made after February 1, 2020 were eligible for rollover.

    2. RMD’s that were taken in periodic payments rather than in a single lump-sum, could only roll back 1 of the periodic distributions.

  2. The IRS has extended the deadline to make these rollovers from July 15 to August 31, 2020.

  3. Owners of Beneficiary or Inherited IRA’s are now also eligible to rollover distributions that have already been taken for 2020 whereas they were previously excluded.

If you have any questions, please contact Jaycee Smalley at 713-388-6322 or jsmalley@newcapitalmgmt.com.

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