RMD, 2019

[tarnish12]

2019 was our first year for RMD from 401's, IRA's & SEP's.  Distributions could be taken up until April 15th, 2020.  Account manager tells me that 2019 RMD's are suspended and 2020 RMD's are postponed indefinitely.  Is this true?  And, if 2019 RMD has been suspended, can I return the money to reduce my tax liability?

[dmertz]

Any portion of your 2019 RMD distributed in 2019 remains an RMD.  Only the portion a 2019 RMD that you deferred to 2020 is waived, along with your 2020 RMD.  (Prior to the waiver, the deadline for taking your 2019 RMD had been April 1, not April 15, 2020.)

What was an RMD distributed in 2020 is now no longer and RMD and can be rolled over, subject to the normal rollover eligibility requirements for distributions that are not RMDs.  The deadline for completing the rollover is the 60th day following the date of the distribution, except that if the distribution qualifies as a coronavirus-related distribution the rollover deadline is extended to the end of the 3-year period beginning on the day after the date of the distribution.

[robtm]

I would like to know where your account manager got his information. I've been looking for this for some time and haven't been able to find anything about the RMD being canceled or suspended for 2019-2020. Once you've made a distribution I don't think you can return it back into the IRA. However you might follow the link below to keep up with the latest coronavirus developments - it's an ever changing situation.

https://ttlc.intuit.com/community/tax-topics/help/how-are-my-taxes-affected-by-covid-19/00/1330402

[dmertz]

Also note that 2020 RMDs are entirely eliminated, not just postponed.  This is all in Section 2203 of the CARES Act (HR 748) signed into law 4 days ago.  The details of this section of the Act are essentially the same as those used to waive 2009 RMDs:  https://www.congress.gov/bill/116th-congress/house-bill/748/text#toc-HC81FF6302B124DC38413B183AC01B2...

In particular, in reference to Section 401(a)(9) of the US Code, "IN GENERAL.—The requirements of this paragraph shall not apply for calendar year 2020 ..."

[fanfare]

@dmertz in your first comment the first sentence of the two paragraphs are contradictory.

[dmertz]

No, they are not.  The requirement to take RMDs is established in section 401(a)(9).  In the second paragraph of my most recent reply, "this paragraph" refers to section 401(a)(9).  Perhaps I should have quoted more of the CARES Act, but I provided a link to it instead.  Rephrasing the CARES Act, it says, "IN GENERAL.—The requirements of section 401(a)(9) shall not apply for calendar year 2020 ..."  The unmodified text becomes part of section 401(a)(9), which is why "this paragraph" means section 401(a)(9).

[fanfare]

"Any portion of your 2019 RMD distributed in 2019 remains an RMD.  "

"What was an RMD distributed in 2019 is now no longer and RMD"

??

[dmertz]

Ah, thanks for that, the second statement contained an editing error.  I've corrected that to say, "What was an RMD distributed in 2020 is now no longer and RMD"