Deadline nears to return IRA RMDs
IRA owners, beneficiaries or workplace retirement plan participants who received a required minimum distribution this year have until Monday, Aug. 31, to roll over or repay the distribution to avoid paying taxes, according to the IRS.
The CARES Act waives RMDs during 2020 for IRAs and retirement plans, including for beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70-½ in 2019 and took their first RMD in 2020. Individuals who took RMDs in 2020, including those who turned 70-½ during 2019, have the option of returning the distribution to their account or other qualified plan.
RMDs can be rolled over to another IRA, another qualified retirement plan or returned to the original plan by Aug. 31, to avoid paying taxes on that distribution.
Notice 2020-51 provides that the one-rollover-per 12-month period limitation and the restriction on rollovers to inherited IRAs don’t apply to this repayment.