August 31st is the Deadline to “Undo” Required Minimum Distributions Taken in 2020
August 31st is the Deadline to “Undo” Required Minimum Distributions Taken in 2020
In March 2020, the CARES Act waived the minimum distribution (RMD) requirement for certain defined contribution plans, 401(k) plans, and IRAs for the 2020 tax year. On June 23, the IRS provided guidance for taxpayers that have already received their 2020 RMD but want to recontribute it without paying taxes on the initial distribution.
The guidance extended the 60-day rollover period for certain distributions to August 31, 2020. Thus, most taxpayers who received an RMD between January and June of 2020 will now have until August 31st to recontribute the funds to a qualified retirement plan as a tax-free rollover. In addition, the guidance also waived the “one rollover every twelve months” rule for IRA owners who took their RMD in monthly installments in 2020, allowing more taxpayers to be eligible for relief.
If you have any questions regarding your eligibility for this relief, please contact us or your fund administrator.