CARES Act Updates to Required Minimum Distributions

According to an announcement by the Internal Revenue Service (IRS) on June 23, 2020, anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts can now roll those funds back into a retirement account following the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) RMD waiver for 2020.

A “rollover” is the mechanism to put back money withdrawn from a tax-deferred account such as an IRA. To allow ample time for taxpayers to take advantage of this opportunity, the 60-day rollover period has been extended to August 31, 2020 for any RMDs already taken this year.

Released on June 23, 2020, IRS Notice 2020-51 describes these changes, as well as answers questions regarding the waiver of RMDs for 2020 under the CARES Act. This especially answers questions regarding those who took their RMDs in January, before the CARES Act was put in place.

The CARES Act allowed any taxpayer with an RMD due in 2020 from a defined-contribution retirement plan to skip those RMDs this year, including 401(k) plans, 403(b) plans or an IRA. This waiver does not apply to defined-benefit plans; however, it does include anyone who turned age 70 ½ in 2019 and would have had to take the first RMD by April 1, 2020.

In addition to the rollover opportunity, an IRA owner or beneficiary who has already received a distribution from an IRA of an amount which would have been an RMD in 2020 can repay the distribution to the IRA by August 31, 2020. According to the notice, this repayment is not subject to the usual rules of one rollover per 12-month period limitation or the restriction on rollovers for inherited IRAs.

The notice provides two sample amendments which employers may adopt. This gives plan participants and beneficiaries whose RMDs are waived a choice as to whether they would like to receive the waived RMD or not.

If you have questions or concerns about your RMD, contact a KerberRose Trusted Wealth Advisor or visit

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