People who took a required minimum distribution (RMD) in 2020 and want to roll it back into an IRA because of the RMD waiver, a reprieve granted by the CARES Act, may have a little more time to do it. Recent IRS guidance includes an extension until July 15, 2020, to complete time-sensitive actions, such as indirect rollovers of retirement account distributions. But the extension only benefits a select group — those who took a distribution in 2020 between February 1 and May 15 and haven't rolled over any other distribution in the past year.
The quirky timeline is because the guidance wasn't written for retirees who took an RMD early in the year and then couldn't pay it back because they didn't meet the 60-day rule. That rule only allows rollovers within 60 days of taking a distribution (and only one indirect rollover is generally allowed per person per year). The IRS guidance, says IRAhelp.com's Ed Slott, was written for "a laundry list of other time-sensitive deadlines. It was written for the bigger fish, and the smaller fish got caught up in it."
So the extension still doesn't help anyone who took an RMD in January 2020. Slott believes the IRS will eventually provide additional clarification that may help these people roll over their 2020 distributions, just not yet. "If they are going to do something fair, they should come out with blanket relief," he says. And there is still time for that to happen. "The tax on that RMD won't be due until April 15, 2021," says Slott. "The IRS has plenty of time to provide retroactive relief."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
-
S&P, Nasdaq Hit New Highs: Stock Market TodayA late-day rally wasn't enough to lift the Dow into the green as its six-session winning streak came to an end.
-
Five Things to Consider Now If You Want to Retire in 2026To retire with confidence in the year ahead, tackle these essential tasks right now.
-
New Tax Rules: Income the IRS Won’t Touch in 2025Income Taxes From financial gifts to Roth withdrawal rules, here’s what income stays tax-free under the new Trump 2025 tax bill, and some information on what’s changed.
-
Three Popular Tax Breaks Are Gone for Good in 2026Tax Breaks Here's a list of federal tax deductions and credits that you can't claim in the 2026 tax year. Plus, high-income earners could get hit by a 'surprise' tax bill.
-
Tax Brackets 2025 Quiz: How Much Do You Know?Quiz Test your knowledge of IRS rules that impact how much money you keep in your wallet.
-
Retirees Face a Growing Capital Gains Tax Trap: What's Next?Home Sales A changing housing market and unchanged IRS exclusion amounts can add up to a headache for many homeowners. Will Congress offer a fix?
-
New York Inflation Refund Checks Are Coming Soon: What to Know NowTax Relief Inflation relief checks are on the way for over 8 million New York taxpayers. Here's a full breakdown of who gets a payment and when you may expect yours.
-
Mortgage Refinance in 2025? These Tax Breaks Can Boost Your SavingsTax Breaks Refinancing your mortgage comes with tax implications, but also opportunities to deduct certain expenses on your return.
-
IRS Phasing Out Paper Checks: What Happens After September 30?Tax Changes Avoid delays when IRS tax refunds and Social Security paper checks are cut off. Here’s what to know.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
