1. Repay more than one RMD distribution. Normally, you are limited to rolling over only one IRA distribution in a one-year period. If you take multiple distributions during this period, you are typically out of luck. However, these are not normal times! In Notice 2020-51, the IRS waives the one-per-year rule for 2020 RMDs. This is good news if you took your RMD in multiple distributions, which many people do. Monthly RMD distributions are common. Now is your chance! These distributions can be repaid to the same IRA they were distributed from by August 31. After that, we all go back to the once-per-year rule.
2. Repay an RMD from an inherited IRA. If there was ever an IRA rule that seemed set in stone, it would seem to be the rule that says that nonspouse beneficiaries cannot roll over a distribution from an inherited IRA. In 2020 even this rule is out the window. Notice 2020-51 allows IRA beneficiaries to repay unneeded 2020 RMDs back to the distributing inherited IRA. This unprecedented relief will disappear after August 31, so don’t delay.
3. Repay an RMD made before the CARES Act waived RMDs. Many IRA owners want to do the right thing. They want to be sure that they take their RMDs and avoid penalties. There are a lot of IRA owners who take their RMDs early in the year to get them out of the way. This year the CARES Act threw a wrench into their careful plans. The CARES Act was passed in March after many diligent IRA owners had already taken their RMDs. For those who have not already done so, the opportunity to roll over these funds is extended beyond the normal 60-day deadline until August 31.
If you fall into one of these three categories and still want to complete a rollover of your RMD, be sure to get it done by August 31!
I am an Ed Slott Master Elite trained IRA Specialist and I would like to help you. If you have any questions regarding this article or would like to schedule a complimentary consultation please call my office at 845-627-8300. My Client Service Coordinator Christina will be happy to set up a convenient time so I can help.Warm Regards,
Beth Blecker CEO
Eastern Planning Inc.
Follow Beth Blecker on Twitter: @EasternPlanning
“Ed Slott’s Elite IRA Advisor Group” is solely an indication that the financial advisor has attended training provided by Ed Slott and Company. Ed Slott is not affiliated with Royal Alliance Associates, Inc. Securities and advisory services offered through Royal Alliance Associates, Inc. Member FINRA/SIPC. Additional advisory and financial planning offered through Affiliated Advisors, Inc. Insurance services offered through Eastern Planning Inc. Listed entities not affiliated with Royal Alliance. Reprinted from The Slott Report, 8/12/2020, with permission. Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article. Copyright © 2019 Ed Slott and Company, LLC.