The New Law states that seniors and retirees not required to take distributions from retirement accounts this year.
In a newsletter published last week, the Internal Revenue Service (IRS) stated that senior citizens and retirees are not required to take money out of their individual retirement accounts (IRAs) and workplace retirement plans this year.
This is because of the following reason;
- This year, the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, waived Required Minimum Distributions (RMDs) for all IRAs and retirement plans, including beneficiaries with inherited accounts.
If, as an individual, you already took an RMD. You have the option of returning the distribution to your account. Or any other qualifying plan. The money must be returned no later than 31 August 2020 to prevent the payment of taxes on it.
Also, know that the RMDs taken in 2020 are eligible for rollover. Because RMD rules are suspended for 2020. As such, RMDs can be rolled over to another IRA, another qualified retirement plan, or returned to the original plan.
Nevertheless, the RMD suspension does not apply to qualified defined benefit plans. The IRS has provided more information to answer questions from the public. But if you still need more information, get in touch with us for further clarification on the matter.