The IRS is reminding seniors and retirees that they are not required to take money out of their IRAs and workplace retirement plans this year. The CARES Act waives Required Minimum Distributions during 2020 for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes Required Minimum Distributions for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020.
What if I already took my RMD?
If an individual has already taken an RMD in 2020, including someone who turned 70 ½ during 2019, the individual will have the option of returning the distribution to their account or other qualified plan. Since the RMD rule is suspended, RMDs taken in 2020 are considered eligible for rollover to another IRA, another qualified retirement plan, or returned to the original plan.
An IRA owner or beneficiary who has already received an RMD in 2020 can also repay the distribution to the distributing IRA no later than Aug. 31, 2020, to avoid paying taxes on that distribution.
The one rollover per 12-month period limitation and the restriction on rollovers to inherited IRAs do not apply to this repayment.
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