As the end of August quickly approaches, it’s worth reminding retirement account owners and beneficiaries that they have until the end of the month to return (rollover) any Required Minimum Distribution (RMD) amounts withdrawn so far in 2020. Individuals should also ensure that they’ve contacted their plan or IRA custodian to update any standing RMD withdrawal instructions in order to avoid unnecessary withdrawals.

This applies to all 2020 RMDs for IRAs, Inherited IRAs & Roth IRAs, and defined contribution plans (401(k)s, 403(b)s, etc.), as well as to 2019 RMDs taken in 2020 by IRA owners who turned age 70 ½ in 2019, and is available for amounts withdrawn as a lump-sum or in multiple installments. Note that any portion withheld for taxes must also be returned in order to avoid it being taxed.

This opportunity is a result of the CARES Act waiving RMDs in 2020 and the IRS announcing further guidance on June 23, 2020 that the deadline to rollover RMD amounts is further extended to August 31st, 2020 (or 60-days from the withdrawal date, if later). In addition, the one-per-year IRA rollover limit is waived for RMD amounts taken from IRAs and returned by August 31st, 2020 as long as the amounts are deposited back into the original “distributing” IRA(s).

Amounts withdrawn on or after September 1st, 2020 may still be rolled over, subject to normal rollover rules including the 60-day deadline and one-per-year limit.

Consult with an attorney or a tax or financial advisor regarding your specific legal, tax, estate planning, or financial situation. The information in this article is not intended as legal or tax advice.