The Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 suspended Required Minimum Distributions during 2020, with some limited allowance for individuals to return unwanted RMDs that were already distributed in early 2020 before the passage of the CARES Act.
However, people who took their RMDs more than 60 days before the March 27 Act were penalized for being proactive and complying with the RMD rules early during the year. In addition, RMDs from inherited/beneficiary IRAs could not be returned to the IRA.
These 2 omissions have since been corrected. On Wednesday, June 23rd, the IRS released a new “Guidance on Waiver of 2020 Required Minimum Distributions”, which extended the 60-day-rollover window to the later of 60-days after a distribution was received or August 31st, allowing for all unwanted 2020 RMD distributions to be returned. It also excludes rollovers taken in 2020 from being counted as a rollover for purposes of the once-per-year rollover rule. And while beneficiaries have been explicitly prohibited from completing 60-day rollovers under previous legislation, beneficiaries who have taken unwanted RMDs this year are now able to repay those RMDs until as late as 8/31/2020.
What this means for you: If you have taken any RMDs this year from any type of IRA or 401K/403b, you can return it by rolling it back into your account. Let us know if you'd like to have us return your RMDs from accounts that we manage for you at TD Ameritrade.
Contact us if you have questions.