Required Minimum Distribution

Rollover Deadline for 2020 Required Minimum Distributions Extended to August 31, 2020.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act waives required minimum distributions (RMDs) from defined contribution tax-qualified retirement plans and IRAs (including inherited IRAs) for 2020.  This includes 2019 RMDs for individuals with an April 1, 2020 RMD “required beginning date.”  Any RMD from a defined benefit plan is not eligible for the waiver.

Although RMDs generally cannot be rolled over, 2020 RMDs are treated as voluntary distributions and are therefore eligible for rollover treatment. Rollovers generally must be done within 60 days of distribution, and IRAs are generally subject to a “one rollover per 12 months” limitation. Earlier this year, the IRS initially extended the 60-day rollover requirement to July 15, 2020, for a 2020 RMD taken as early as February 1, 2020.

The latest guidance provides that individuals who received mandatory distributions from qualified retirement accounts earlier this year now have until August 31, 2020 to return or “re-contribute” the funds they don’t need without facing any tax penalties.  In addition,  the “one rollover per 12 months” limitation for IRAs and non-spouse IRA beneficiaries is waived for this purpose. The rollover opportunity is also available for a 2020 distribution that is part of “a series of substantially equal periodic payments for purposes”.  In addition, for plan participants with a required beginning date of April 1, 2021, distributions paid in 2021 that would have been RMDs for 2021 may be rolled over to the extent an earlier distribution in 2021 has satisfied the 2021 RMD obligation.


Taxpayer takes an RMD from a defined contribution plan, which includes IRAs  on a monthly basis of $10,000 per month. For 2020, monthly distributions total $80,000 through August. If the taxpayer does not need the retirement funds, the taxpayer can write a check returning the $80,000 to the plan administrator and would avoid any income tax on the $80,000 distribution.  The taxpayer can inform the plan administrator to cease any remaining monthly distributions for the remainder of 2020.

The change in the law suspends, for the 2020 calendar year only, the requirement that covered plans and arrangements contain provisions requiring RMDs. It does not require that any plan or arrangement eliminate the plan’s distribution requirement for 2020. Plans and arrangements must be formally amended to eliminate the requirement. An amendment will be treated as timely if it is made on or before the last day of the first plan year beginning on or after January 1, 2022.

Sax will continue to update you as further details are made available.  Reach out to your Sax advisor or email [email protected] with questions.  For more and on-going information, visit Sax’s COVID-19 Resource Center.

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