IRS Advises on Rollovers of Required Minimum Distributions

UIL: 401.06-00
Release Date: 9/25/2020

Date: July 7, 2020

Refer Reply To: CONEX-113385-20

The Honorable Maria Cantwell
United States Senator
920 West Riverside Avenue, Suite 697
Spokane, WA 99201

Attention: * * *

Dear Senator Cantwell:

I am responding to your inquiry dated June 9, 2020, on behalf of your constituent, * * *. * * * explained he received his required minimum distribution (RMD) in January 2020 and asked if he can roll over the RMD back to his IRA. He also asked if he can replace the distribution within 3 years because he had COVID-19.

Section 2203 of the CARES Act of March 27, 2020, waived all RMDs for the 2020 calendar year. Therefore, individuals can roll over any RMD paid from an IRA in 2020. In addition, Section 2202 of the CARES Act provided that any coronavirus-related distribution may be repaid within 3 years of the date of distribution. A coronavirus-related distribution includes a distribution made between January 1, 2020 and December 30, 2020 to an individual diagnosed with COVID-19.

Generally, an IRA owner has 60 days from the IRA distribution to roll over that amount to an IRA or other eligible retirement plan. However, the CARES Act was enacted after the 60-day period for distributions made in January 2020 had passed. Therefore, on June 23, 2020, we issued Notice 2020-51 to extend the deadline to roll over any 2020 RMD paid in January 2020 to August 31, 2020. In addition, individuals may repay amounts equal to the 2020 RMD into the IRA that distributed the RMD. That repayment will not be treated as a rollover for purposes of the “one rollover per year” rule.

In addition, on April 9, 2020, we issued Notice 2020-23, 2020-18 IRB 742, to extend the 60-day rollover distribution deadline to July 15, 2020 for distributions made between February 1, 2020, and May 16, 2020, that would have been required to be rolled over between April 1, 2020, and July 15, 2020.

However, the normal 60-day deadline still applies to any 2020 RMDs paid on or after May 16, 2020.

For your convenience, I have enclosed a copy of Notice 2020-23 and Notice 2020-51.

I hope this information is helpful. If you have any additional questions, please contact me at * * * or * * * at * * *.

Sincerely,

Laura B. Warshawsky
Branch Chief, Qualified Plans Branch 1
(Employee Benefits, Exempt Organizations, and Employment Taxes)

Enclosures (2)