IRS clarifies waiver of 2020 RMDs

Tax Hot Topics newsletter The IRS issued Notice 2020-51 to clarify guidance related to the waiver of 2020 required minimum distributions (RMDs) from certain retirement plans pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act. .

Specifically, the notice:
  • Permits rollovers of waived RMDs and certain related payments, including an extension of the 60-day rollover period for certain distributions to Aug. 31, 2020
  • Answers questions relating to the waiver of 2020 RMDs
  • Clarifies that the waiver of 2020 RMDs does not apply to defined benefit plans
  • Addresses RMD implications for individual retirement accounts (IRAs)
  • Provides a sample plan amendment that, if adopted, would provide participants a choice whether to receive waived RMDs and certain related payments

For plan distributions made in 2020 that would have been an RMD but for the change in the required beginning date pursuant to the Setting Every Community Up for Retirement Enhancement (SECURE) Act, the notice also provides transition relief allowing plan administrators and payors to not treat such distributions as eligible rollover distributions.

Jeff Martin
Washington National Tax Office
T +1 202 521 1526

Keith Mong
Managing Director
Washington National Tax Office
+1 202 521 1554

James Sanchez
Senior Associate
Washington National Tax Office
+1 202 861 4107

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