Important IRA Announcement on RMDs Waived by Coronavirus Relief

The CARES Act, which was passed in Congress earlier this year to provide relief for those impacted by the coronavirus, permits IRA holders impacted by the virus to waive their 2020 Required Minimum Distributions. Now the IRS has updated their guidance and has announced that anyone who already took an RMD in 2020 can now roll those funds back into their account.

This must be done by Aug. 31, 2020. You can learn more about this via the IRS’ bulletin which can be found here: https://www.irs.gov/pub/irs-drop/n-20-51.pdf

The 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.