Latest COVID-19 IRA Relief from the IRS - Genser Cona Elder Law
Latest COVID-19 IRA Relief from the IRS

Latest COVID-19 IRA Relief from the IRS

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In a previous article, How COVID-19 has Impacted Your IRA in 2020, we explained the drastic new rules for IRAs in 2020. One of the major changes was that Required Minimum Distributions (RMDs) were waived in 2020. But what if you already took some or all of your RMDs for 2020? The IRS has issued new guidance to help those IRA owners:

  • In general, an IRA distribution, including an RMD, can be contributed back to that IRA within 60 days of the original distribution, and no income taxes would need to be paid. Previously, the 60 day deadline was extended through July 15, 2020. The new guidance extends this deadline even further, until August 31, 2020. Therefore, regardless of when you withdrew the RMD, in order to avoid an income tax liability, you must return the monies to the IRA by August 31, 2020.
  • Some IRA owners have their RMDs automatically withdrawn each month. The new guidance further helps those IRA owners who made withdrawals at the beginning of the year, who were initially not covered. Now, with the new guidance from the IRS, any RMD taken in 2020 can be contributed back to the IRA as long as it is done by August 31, 2020.
  • The new guidance also allows 2020 RMDs withdrawn from beneficiary or inherited IRAs to be contributed back, which was not previously allowed.

There may be exceptions and rules that must be followed to qualify for some of the above. As always, speak to your accountant regarding your personal tax circumstances.

If you have any questions about your IRA or any other part of your estate plan, the attorneys at Genser Cona Elder Law are ready to assist. Call us at 631.390.5000 or click here.

About the Author Genser Cona Elder Law

Genser Cona Elder Law is a full service law firm based in Melville, LI. Our firm concentrates in the areas of elder law, estate planning, estate administration and litigation, special needs planning and health care facility representation. We are proud to have been recognized for our innovative strategies, creative techniques and unparalleled negotiating skills unendingly driven toward our paramount objective - satisfying the needs of our clients.

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