Repayments to IRA in 2020
Two questions:
1) Can someone still repay a 2020 RMD, or was there a deadline for this that has already passed?
2) If someone (over 70 1/2) took a distribution from their IRA in 2020, can they repay it without any tax impact or penalty? Would the distribution have to qualify as COVID related (either they had COVID or they were impacted by a quarantine, etc.) to be able to put the money back into their IRA without any taxes or penalties?
Thank you!
Permalink Submitted by Alan - IRA critic on Fri, 2020-12-04 22:09
The special extended rollover provisions of the past expired on 8/31 or earlier. However, since a 2020 distribution is not an RMD, a distribution can still be returned within 60 days of receipt as a 60 day rollover subject to the one rollover limitation. There is no Covid related requirement to do that. If a distribution was previously returned under one of the special provisions then those rollovers do not count against the one rollover limit, but one they do now will be subject to that limit. In other words, the distribution yet to be rolled back would have had to be distributed after the first week of October to still be within the 60 day time limit. If so, they would just report a rollover on Form 1040 and there would be no tax or penalty due.