Did You Take A Required Minimum Distribution In 2020 From Your Retirement Account? If So, You May Be Able To Put It Back.

If you took a required minimum distribution from your retirement account this year and want to reverse it, you now may be able to. The IRS announced on 6/23/20 that anyone who already has taken an RMD in 2020 from certain retirement accounts has until Aug. 31 to put the money back. (https://www.irs.gov/pub/irs-drop/n-20-51.pdf) The announcement comes several months after the CARES Act eliminated those mandated distributions for the year — yet some people already had taken them before the law’s passage.

The CARES Act, signed into law in late March, enables any taxpayer facing an RMD in 2020 from their defined-contribution retirement plan — including a 401(k) or 403(b) plan — or their individual retirement account, to skip those withdrawals this year. This includes anyone who turned age 70½ in 2019 and would have had to take the first RMD by April 1, 2020. The waiver does not apply to defined-benefit plans (i.e., pensions.)

The IRS’s new relief applies to individuals who face RMDs either due to their age or because they inherited an account that comes with those mandated withdrawals.  If you have any questions about these new rules, please contact your CPA for guidance.  And, as always, please contact us if you have any questions relating to RMDs or other issues related to your finances.