The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains provisions waiving the requirement that retirement plan participants and owners of IRAs must take a required minimum distribution (“RMD”) for the 2020 taxable year. While many taxpayers may have already taken advantage of that waiver, there are others who may have received their 2020 RMD, either before the enactment of the CARES Act or inadvertently.
The Internal Revenue Service has provided guidance in Notice 2020-51 (“Notice”) for those who received a 2020 RMD but who nonetheless wish to take advantage of the CARES Act waiver of the RMD requirement for 2020. The Notice provides that 2020 RMDs can be treated as amounts eligible for rollover treatment (despite the normal rule that an RMD may not be rolled over) and extends the normal 60-day rollover period to August 31, 2020 (“Extended Rollover Date”).
Anyone who is eligible for this relief must either roll over their 2020 RMD to another eligible retirement plan or IRA, or return the 2020 RMD to the plan or IRA from which the 2020 RMD was received, by August 31, 2020.