An Unwanted 2009 Required Minimum Distribution

Friday, October 16, 2009

By Beverly DeVeny, IRA Technical Expert
Follow Me on Twitter: @BevIRAEdSlott

Required minimum distributions were waived for 2009, but the legislation wasn’t passed until late in 2008. This led to some confusion earlier this year for plan administrators, IRA custodians, and retirement account owners just like you. In some cases, automatic distributions were made to taxpayers before they could be shut off. Not all RMD recipients realized that they could simply roll those distributions back to an eligible retirement account within 60 days.

Now the IRS has (finally) released guidance in Notice 2009-82 allowing many taxpayers to roll those unwanted distributions over. You have until November 30, 2009 to roll over a qualifying distribution.

Plan participants can roll over any distribution that contains all or part of what would have been a 2009 RMD.

IRA account owners who have not done a 60-day rollover in the last 12 months from the distributing IRA (the account where the “RMD” came from) can roll over one distribution that contains all or part of what would have been a 2009 RMD.

Non-spouse beneficiaries of inherited accounts cannot roll over any 2009 distributions since they are prohibited from ever doing a 60-day rollover.

You should check with your advisor or tax preparer to determine if your distribution is eligible for this rollover relief.

 

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