Treasury issued Notice 2020-51 today on CARES Act § 2203, the 2020 Waiver of Required Minimum Distributions (“RMDs”) that contained important (and in part some surprising) guidance.  Here are some of these important points.

  • All distributions in 2020 from a Plan or IRA that were 2020 RMDs can be rolled over or put back into the Plan or IRA so long as that is completed by August 31, 2020.
  • The ability to put the funds back into an IRA includes the ability of a beneficiary of an inherited IRA to return to the inherited IRA the funds distributed to the beneficiary as a 2020 RMD.
  • A distribution in 2020 that is part of a series of substantially equal periodic payments may also be rolled over, although the plan participant can’t cease those payments in 2020 without penalty.
  • The one rollover per 12 month limitation does not apply to 2020 RMD distributions.
  • If a participant reaches his or her Required Beginning Date in 2020, no distributions need to be made in 2020 and any distribution in 2021 will only be for a 2021 RMD even if prior to April 1, 2021.
  • If the participant or beneficiary dies in 2020, there is no extension of the 5-year period that otherwise applies to distributions under the 5 year rule for a participant who died prior to 2020, and there is no extension of the new 10 year rule put in place by the SECURE Act.