Rollover of 2020 SEP-IRA Distributions | Ed Slott and Company, LLC

Rollover of 2020 SEP-IRA Distributions

This past January a client took a $48,000 distribution from his SEP-IRA to meet his 2020 RMD, and his wife took $12,000 from her SEP-IRA to satisfy her RMD. The wife died in March, and the client took her SEP-IRA and transferred it to his SEP-IRA. Can the client now put the $60,000 back into his SEP-IRA? Appreciate your comments on this.

  • With respect to the 48k distribution, to date the IRS has not provided rollover relief for January distributions to be rolled over. However, if client qualifies for a CRD at some point this year, he will be able to roll over that distribution up to 3 years from January, 2020. It is also possible that furture guidance will allow the rollover even without qualifying for a CRD, but at this point the distribution is not eligible to be rolled over.
  • With respect to the 12,000 distribution, the above also applies. But in addition, despite several IRS PLRs that have allowed the executor of the deceased spouse to rollover a pre death distribution to an inherited IRA, some custodians might require client to secure their own PLR to accept the rollover. A 12k distribution is not worth the cost of pursuing a PLR, so even if the above requirements are met, the client would probably limit their rollover efforts to finding a custodian that would allow an inherited IRA to be created to accept the rollover.

Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.

I agree to the terms and services:

You may review the terms and conditions here.