Rollover Deadline for 2020 RMDs Extended by IRS to August 31, 2020

Once again, the deadline has been extended for rolling over an unwanted required minimum distribution (RMD) taken from an IRA or company plan in 2020. On June 23, 2020, the IRS issued Notice 2020-51 which stated that any unwanted RMDs already taken during 2020 could be repaid via a “rollover” or “repayment” back to an IRA or company plan by August 31, 2020.

What’s Changed from Earlier this Year

Earlier this year, the CARES Act, which was signed into law on March 27, 2020, suspended the requirement to take 2020 RMDs from IRAs and company plans. For people that had already taken their 2020 RMDs prior to March 27, 2020, the CARES Act also stated that for RMDs taken on February 1, 2020, or after, the deadline for rolling over these unwanted RMDs back into an IRA or company plan would be extended until July 15, 2020. However, the CARES Act did not apply to RMDs taken in January 2020. Those distributions taken in January 2020 did not get any relief under the CARES Act. The new IRS Notice 2020-51 (issued on June 23, 2020) applies to all RMDs taken in 2020, including those taken in January 2020, and extends the deadline for rolling over these unwanted RMDs back into an IRA or company plan to August 31, 2020.

This IRS Notice also states that the rollover or repayment of an RMD will not be treated as a rollover for purposes of the “one rollover per 12-month period” rule. Therefore, this allows all 2020 monthly RMDs to be repaid.

In addition, the IRS Notice allows “non-spouse beneficiaries” to repay RMDs already received earlier in the year from inherited IRAs.

Non-RMD Funds

IRS Notice 2020-51 only applies to RMD payments. Therefore, if you withdrew non-RMD funds, you are still required to adhere to the 60-day rollover deadline (or the July 15, 2020 deadline for distributions received after January 31, 2020). In addition, distributions of amounts other than RMDs are still subject to the “once-per-12 month” rollover rule.

How DHJJ Financial Advisors Can Help

If you have questions about rolling over an unwanted required minimum distribution connect with a DHJJ Financial Advisor by filling out the form below.