Return of RMD after 8/31

Submitted by Baird Wealth Planning on Mon, 2020-10-26 13:38

Now that the 8/31 deadline has passed, do those still within the 60 day window get the benefits listed in Notice 2020-51?

For an individual who took their RMD in September, can they still return to the distributing IRA within 60 days and avoid the once-per-year rollover rule?

If a beneficiary took a lump-sum distribution from their inherited IRA, under the 10 year RMD rule, on August 31st, can they still return it to the distributing IRA?

The notice seems to imply that the august 31 deadline only applies if outside of the 60-day window, so if within the 60 days, it can still be returned to the distributing IRA and avoid the once per year and beneficiary rollover rules, but I wanted to get your opinion on the matter.



Submitted by Alan - IRA critic on Mon, 2020-10-26 18:01

  • Notice 2020-51 benefits expired 8/31. However, if an individual took a distribution in Sept and is still within 60 days of receipt, they can roll that distribution (would be RMD or not) to any IRA. However, it does not appear that the one rollover limit is waived for rollovers after 8/31, and therefore such a rollover even if within 60 days would be subject to the one rollover limitation.
  • An inherited IRA distribution would not be eligible for rollover after 8/31 even if within 60 days. 
  • Therefore, after 8/31 rollovers become subject to all the usual limitations (one rollover limit, no rollover of non spouse inherited IRA distribution), however in other situations the rollover can still be done subject to the 60 day deadline unless the distribution was an RMD for a year earlier than 2020.
  • Exceptions do apply if the beneficiary becomes eligible and takes a CRD distribution up to 12/30/2020.

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