August 31 Is 2020 RMD Rollover Deadline For Some

ERISA consultants at the Retirement Learning Center (RLC) Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings and income plans, including nonqualified plans, stock options, and Social Security and Medicare.  We bring Case of the Week to you to highlight the most relevant topics affecting your business.  

A recent call with a financial advisor from Maryland is representative of a common inquiry related to the 2020 waiver of required minimum distributions and rollovers. The advisor asked: “Can you remind me of the key points related to the waiver of RMDs for 2020?”

Highlights of the Discussion

• You as a timely question as August 31, 2020, is a key deadline by which certain rollovers of 2020 RMDs must be accomplished. 

• Section 2203 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (CARES Act) waives RMDs for IRAs, defined contribution, 403(a) qualified annuity, 403(b) or governmental 457(b) plans for 2020.  

• Defined benefit plans are not covered by this wavier.   

• The deadline for rolling over 2020 RMDs is the later of August 31, 2020, or 60 days after receipt of the distribution;  

• A 2020 RMD that is rolled over by the August 31, 2020 deadline does not count toward the one-rollover-per-12-month rule applicable to IRA-to-IRA rollovers; 

• Nonspouse beneficiaries also are allowed to roll over 2020 RMDs, if they do so by August 31, 2020; and 

• A 2020 RMD from a plan or IRA may be rolled back into the same plan or IRA (provided the plan permits incoming rollovers). 

Conclusion

The CARES Act waives the necessity to take 2020 RMDs from IRAs and most qualified retirement plans. August 31, 2020, is a key deadline by which certain rollovers of 2020 RMDs must be accomplished. Please refer to IRS Notice 2020-51 for additional guidance.