I hope all of my readers continue to be well.
In my May 1 posting, I wrote about how the CARES Act waives required minimum distributions from retirement accounts for 2020, and, if you’ve already taken a distribution this year, that you can return it under certain circumstances. However, I also pointed out that you could return your required minimum distribution only if (1) you were the plan participant or a spousal beneficiary and (2) you took the distribution after January 31, 2020.
That has changed! The IRS issued Notice 2020-51 on June 23, saying that required minimum distributions are not required to be taken in 2020, even if the distribution is taken by a nonspouse beneficiary (i.e., from an inherited retirement account). Additionally, there is no longer a requirement that the distribution be taken after January 31, 2020. Finally, if you did take a distribution in 2020 and you don’t want it and don’t want to pay taxes on it, you have until August 31, 2020 to return the distribution to the retirement plan.
I hope this is helpful to you. Please take care and stay safe.
Very truly yours,