Retirement help: Feds pause minimum distribution deadlines, provide other relief
Realizing that, with all the market uncertainty, now may not be the best time to force people to start depleting their retirement account, the federal government hit the pause button on IRA required minimum distributions — and also extended the contribution deadline.
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the age when retirees must start taking required minimum distributions (RMD) is now 72 or 70 ½ for those who turned 70½ before 2020.
The IRS, under the CARES Act, has also provided the following relief for retirees:
- Any taxpayer with an RMD due in 2020 from a defined-contribution retirement plan, including a 401(k) or 403(b) plan, or an IRA, can skip the RMD for this year. It includes taxpayers who turned 70½ and normally would be required to take their first RMD by April 1.
- IRA owners or beneficiaries who already taken their RMD this year can repay the distribution to the IRA by Aug. 31. According to the IRS, “This repayment is not subject to the one rollover per 12-month period limitation and the restriction on rollovers for inherited IRAs.’’
Unfortunately, retirees who turned 70½ in 2019 and took their initial RMD in 2019 do not qualify for retroactive relief.
The new rules for delaying required rollovers are complicated and we recommend checking with your tax advisor to ensure you are following the latest guidelines.
Romulus C. Comly is a Principal with Boyer & Ritter LLC provides accounting, auditing, tax and management consulting services for a variety of public sector and governmental entities and has extensive experience working with clients subject to the Single Audit Act. Contact Romulus at 814-234-6919 or email@example.com