In 2020 my wife lost her job, and therefore qualifies for CARES act benefits. That year, she converted the remainder of her pre-tax-basis Traditional IRA to her Roth IRA. The transaction, as usual, is early distribution of retirement funds, taxable as income, and exempt from early withdrawal penalty due to immediate conversion to Roth. We've paid the income taxes on the converted amount.
Last night I read up on some details of the CARES act, and it says that you don't have to pay income tax on the distribution if you pay it back into a qualified retirement account (Roth IRA's included).
Well, we took a distribution, and then we put it right back into a qualified retirement account. Is it a stretch to interpret that as doing exactly what the CARES act describes (receive distribution, then pay it back into any qualifying retirement account), and could therefore file an amendment to recover the income taxes paid on the distribution?
I saw one thread here which suggested that conversions were not in scope for the CARES act, but the answer was not certain (sort of "go ahead and try it, and see how IRS likes it!"). Would appreciate if someone could answer with certainty from experience or from "the book". Thanks!
