By: Staff
on April 13, 2020

Required Minimum Distribution-Cares Act-Fee Only-Financial Advisor-Jupiter FL

Included in the CARES Act, which was signed into law on Friday, March 27th, 2020, are provisions related to tax-deferred retirement plans/IRAs and minimum distribution requirements for 2020.

Specifically, regardless of your age, all minimum distribution requirements from tax-deferred retirement plans and IRAs have been suspended for 2020.  Of course, you can take withdrawals if you choose, but you are not required to do so.

If you have already taken your 2020 Required Minimum Distribution (RMD) from a tax-deferred account (excluding inherited IRAs), you can put the money back into the account without penalty.

  • If the distribution was taken within the last 60 days, it will be treated as a rollover and the funds can be redeposited into the account
  • If the distribution was taken more than 60 days ago, if you can show that you have been impacted by the COVID-19 crisis, then the rollover can still be completed.

Additionally, if you turned 70 ½ in 2019 and deferred taking your RMD in 2019 electing to delay it until 4/1/2020, you do NOT need to take that withdrawal in 2020 and you do not need to take your 2020 RMD either.

If you are the beneficiary of an Inherited IRA and you have not already taken your 2020 RMD, you do not have to.  However, if you already did take the distribution, there is no relief – you cannot put the money back into the account.  Additionally, if you are the beneficiary of an Inherited IRA and you have chosen to distribute the account over 5 years (as compared to over your life expectancy), 2020 is not counted so effectively, the account can be distributed over six years instead of five.

There are several other provisions in the CARES Act pertaining to retirement accounts, including penalty-free distributions for those under 59 1/2 as well as loan provisions.  Please contact us if you have any questions regarding your Minimum Distribution Requirements for 2020 or any other retirement or cash flow planning questions.

Schanel & Associates is a CPA firm specializing in accounting, tax, business valuation and litigation support serving Palm Beach, Martin and St. Lucie Counties and beyond since 1993. Our CPAs and accounting professionals work with individuals, businesses, estates and trusts to provide everything you need under one roof. For more information, contact us today at 561-624-2118.
Todd Schanel has been a principal at Schanel & Associates since 2004, where he specializes in financial planning, tax planning and consulting services. He also serves as Founding Principal and Director of Investment Advisory Services at Core Wealth Management, our sister company, where he leads an accomplished professional team offering independent and objective financial advice to help clients achieve their financial goals. Todd has been a CFA Charterholder since 2005, and in 2007 he earned his Certified Financial Planner® designation and became a licensed CPA. In 2015, he earned the Certified Valuation Analyst (CVA) designation.