Coronavirus Aid, Relief, And Economic Security Act Badges: Pile of CARES Act Buttons With US Flag, 3d illustrationI hope all of my readers are well.

By now, all of you should have heard of the CARES (the Coronavirus Aid, Relief and Economic Security) Act signed into law on March 27. It’s the federal economic stimulus package that provides, among other things, for expanded unemployment benefits and loans for businesses struggling with the economic impact of the COVID-19 pandemic.

You may also have heard that the CARES Act allows people who must take required minimum distributions (“RMD”) from their retirement accounts to skip their distribution for 2020 without penalty. So, if you don’t need the money and don’t want to pay the taxes, this might be good news for you.

But what if you are efficient and have already taken your RMD in 2020? You can put it back as long as you do so within sixty days of the date you withdrew the funds. If this sounds good to you, I suggest you consult with your tax professional and your financial advisor to see what they say.

What if you, like me, inherited a retirement account from someone who died before 2020? Under the CARES Act, the rule about waiving the required distribution is the same. However, since you cannot contribute to an inherited retirement account, the rule for redepositing funds you withdrew in 2020 is different. If you took the money out already this year, you can’t put it back, and you are stuck — just like I am.

I hope this is helpful to you. Please take care and stay safe.

Very truly yours,

Jan Copley

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