Top 12 RMD Waiver Questions | Ed Slott and Company, LLC

Top 12 RMD Waiver Questions

By Andy Ives, CFP®, AIF®
IRA Analyst
Follow Us on Twitter: 
@theslottreport


As we have written on many occasions, the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) waives required minimum distributions (RMDs) for 2020. This waiver applies to company savings plans and IRAs, including both inherited traditional and inherited Roth IRAs. While that sounds like a straightforward announcement, the RMD waiver has generated a landslide of inquiries and confusion since the CARES Act was passed in late March. Here are a dozen of the most popular and widely applicable Yes/No questions and answers:


1. My RMD is sent to me automatically on a monthly schedule. Even though I already took a portion of my 2020 RMD, can I stop the remaining monthly payments? YES


2. My 75-year-old father passed away in January without taking his 2020 RMD. Now my siblings and I are establishing inherited IRAs. Do we need to take his year-of-death RMD? NO


3. Can I still take my 2020 RMD if I want to? YES


4. Since RMDs are waived for 2020, if I decide to take it anyway, does that mean there is no tax due on that withdrawal? NO


5. If I received multiple 2020 RMD payments, can I roll them all back to my IRA? YES (as long as they are all returned by August 31, 2020).


6. I have an inherited IRA and already took my RMD. Can I roll it back/replace it? YES (as long as the inherited RMD is repaid to the same IRA by August 31, 2020).


7. Will I need to take both my 2020 and my 2021 RMD next year? NO


8. Since RMDs are waived, can I do a Roth conversion without taking my RMD first? YES


9. I turned 70½ last year and my first RMD was for 2019, but my required beginning date was April 1, 2020. I delayed taking this first RMD until 2020. Is that RMD waived under the CARES Act? YES


10. Can I now roll my 401(k) into an IRA without taking the 2020 RMD? YES


11. Can I still do a qualified charitable distribution (QCD) even though my RMD is waived? YES (as long as you are otherwise eligible).


12. Do I need to be  an “affected person” under the coronavirus rules for the RMD waiver to apply to me? NO

 

 


Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to matt@irahelp.com for approval.

For white papers/other outflow pieces:
Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:
Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:
Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at matt@irahelp.com or (516) 536-8282 with any questions.

 

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.