For Individuals,For Plan Sponsors,Retirement Savings Plans,Custom

IRS Provides Additional Guidance/Relief on Required Minimum Distributions

July 2, 2020

On June 23, 2020, the Internal Revenue Service (IRS) released Notice 2020-51, which provides guidance on the Coronavirus Aid, Relief, and Economic Security (CARES) Act's waiver of required minimum distributions (RMD).

The following are highlights:

  • The normal 60-day rollover period for an RMD has been extended to August 31, 2020. This means that a participant who received a distribution in 2020 that would have been an RMD prior to the CARES Act waiver can roll the payment into a 401(k), 457(b), 403(b) or IRA, as long as this occurs by August 31, 2020.
  • The extension does not apply to defined benefit plans.
  • An IRA repayment back to the same IRA the RMD was distributed from is not subject to the one rollover per 12-month period limitation or the restriction on rollovers for inherited IRAs.

ICMA-RC is analyzing and incorporating this additional guidance into processes and procedures, and we will keep you informed of future regulatory guidance as they develop.

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