While the 4 Questions during the Passover holiday asks why this night is different than all other nights, the Internal Revenue Service (IRS) has reminded us that this year for required minimum distributions (RMDs) are different than all other years.
On July 17th, the IRS reminded us of the change in 2020, thanks to the CARES Act. The CARES Act waives RMDs during 2020 for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70½ in 2019 and took their first RMD in 2020.
No distributions from a defined contribution plan or IRA made in 2020 are considered RMDs. The distribution that would have been an RMD (if this was any other year) rather is an eligible rollover distribution and can be rolled back into the same plan, if the plan allows that, or to any other plan or IRA that may accept eligible rollovers.
The IRS also reminded us that an IRA owner or beneficiary who already received their RMD in 2020 and who wants to repay the distribution to the distributing IRA must do so no later than Aug. 31, 2020, to avoid paying taxes on that distribution.
