Financial Planning Insights
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The CARES Act, which was signed into law on March 27, 2020, waived all required minimum distributions (RMDs) for this year. This included:
This week the IRS issued a release stating that ALL funds withdrawn for purposes of satisfying a RMD can be rolled back into the IRA account. Even funds taken by non-spousal beneficiaries holding inherited retirement account balances. The deadline is extended to August 31, 2020.
Such rollovers will not be held to the normal 60-day requirement. Nor will they count toward the one 60-day rollover per 12-month period rule. This means that regardless of how early in the year the funds were withdrawn, they can be rolled back into the account as long as it is done by August 31, 2020.
It also means that individuals who take their withdrawals in a series (monthly, quarterly) may return an amount up to the total of all RMD withdrawals that have been taken this year. This release expands its prior guidance which seemed to provide a much more limited ability to roll back previously distributed funds.
Please note that these new rules apply only to RMD related funds. Any funds withdrawn beyond the RMD amount will continue to be treated under normal IRS rules.
Connect with Your Advisor
If you have any questions regarding this new IRS notice, please contact your Johnson Financial Group Advisor for further discussion.
