The IRS is providing relief to taxpayers who had already taken RMDs in 2020 before the CARES Act suspended the RMD requirement in response to the coronavirus pandemic and its effect on taxpayers and the stock market.
What you need to know:
- Anyone who already has taken an RMD in 2020 from certain retirement accounts has until Aug. 31 to put the money back.
- Applies to individuals who face RMDs either due to their age or because they inherited an account that comes with those mandated withdrawals.
- The repayment is not subject to the one rollover per 12-month period limitation and the restriction on rollovers for inherited IRAs.
- The waiver of RMDs does not apply to defined benefit plans (pensions). View Notice and Q&A Here : N-2020-51
- The minimum amount you must withdraw from your account each year.
- You can withdraw more than the minimum required amount.
- Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).