As you may remember from our previous post,“FAQs About Your RMDs” the rules around taking your RMD (Required Minimum Distribution) can be complex and the tax penalties for not taking the correct amount can be harsh. For that reason, many choose to take their RMD at the beginning of the year to “get it over with” if you will. Laws surrounding RMDs have recently received a lot of time in the spotlight. Announced last year, the SECURE Act changed the RMD age from 70 ½ to 72 and the CARES Act from late March 2020 allowed people to not take their RMD for the remainder of 2020.
But what about those who already took it pre-CARES Act? Can it be reversed?
As of June 23rd 2020, the IRS 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.
The IRS described this change in Notice 2020-51 (PDF). The Notice also answers questions regarding the waiver of RMDs for 2020 under the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act.”
If you’ve already taken an RMD for this year (full or partial) and would like to discuss your option of rolling it back into your account, please give us a call.