By Shanna N. Yonke
April 17, 2020
In our recent blog post, The Early Bird RMD Doesn’t Get the Tax Relief Worm, we provided guidance regarding the suspension of required minimum distributions (RMDs) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). We advised that if you already took your RMD for 2020, the CARES Act may allow you to roll over the RMD if you took the RMD within the last 60 days.
A few days after that blog post, the IRS extended the 60-day rollover deadline until July 15, 2020, otherwise the deadline would have fallen between April 1, 2020 and July 14, 2020. While this extension may allow some to take advantage of the 60-day rollover, it doesn’t help those who took their 2020 RMDs before February 1, 2020.
In addition, the same restrictions as described in our previous blog post still apply:
- The rollover must be in the same form as the distribution. In other words, if you took a cash distribution, the rollover must be made in cash. If you already used the cash to purchase an investment, you can’t rollover the investment instead of the cash.
- You can’t roll over the distribution if you already did a tax-free rollover within the 12 months prior to the distribution, except there is no limit on the number of IRA-to-qualified plan rollovers (or qualified plan-to-IRA rollovers) you can do within a 12-month period.
- If you took the distribution from an inherited plan, the distribution can’t be rolled over unless you are the surviving spouse of the deceased owner
Please contact any attorney in Ruder Ware’s Estate Planning team if you have any questions regarding your RMDs or other aspects of your retirement accounts in light of the COVID-19 pandemic.
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