IRS Required Minimum Distribution Waiver Expiring Soon

On June 23, 2020, the Internal Revenue Service (IRS) announced an extension of the CARES Act Required Minimum Distribution (RMD) waiver. This extension gives you the opportunity to return your RMD funds back into your retirement account without additional tax or penalties.

The August 31, 2020 extended deadline is quickly approaching, so if you haven’t taken any action now is the time.

Yankee Farm Credit’s VP of Financial Services, Michael Moloney sat down with the Yankee Farm Credit Resource Center, to offer some insight into the RMD waiver.
 
What are Required Minimum Distributions (RMD)?
If you reached age 70 ½ during 2019 you were required to take an RMD from your defined contribution retirement plan(s) other than Roth IRA’s.
They are calculated based on your account balance and life expectancy at the end of the previous year divided by a factor number from an IRS worksheet.
 
What provisions were made in relation to RMDs in the CARES Act?
RMD distributions were waived under the CARES Act in order to allow account balances to recover following the stock market downturn in March of 2020.
The Act also allowed taxpayers who had already received their RMD for 2020 to return it without incurring any taxes or penalties.
Finally the ACT changed the age at which RMD’s are required from 70 ½ to 72.
 
Why would I want to return the RMD if I have already taken it for 2020?
Returning the RMD will allow those funds to continue to grow within your account.
 
How to I return a RMD?
Contact your financial institution for specific guidance on how to return an RMD.
 
For the full IRS notice regarding the CARES Act RMD waiver, visit,
https://www.irs.gov/newsroom/irs-announces-rollover-relief-for-required-minimum-distributions-from-retirement-accounts-that-were-waived-under-the-cares-act

Still have questions or concerns about RMD, or other available tax opportunities?
Contact the YFC Tax Team Today!

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