Q&As Regarding 2020 RMD Waiver


CUNA’s April 1, 2020 compliance blog provides the Q&As below from Dennis Zuehlke, ERISA compliance manager with Ascensus, to get expert information on IRAs and the 2020 required minimum distributions (RMD) waiver.

Q: What types of retirement plans are covered by the 2020 RMD waiver?
A: IRAs (including SIMPLE IRAs and SEP IRAs) and defined contributions plans (such as 401(k) and 403(b) plans) are covered by the 2020 RMD waiver.

Q: Who is eligible for a waiver of the 2020 RMD?
A: IRA owners, including beneficiaries, will not be required to take a 2020 RMD from their IRAs or Inherited IRAs. The RMD waiver also applies to individuals who turned 70½ in 2019 but did not take their RMD before January 1, 2020. The same participants in defined contributions plans are also covered. 

Q: What if an IRA owner or beneficiary doesn't want their RMD waived?
A: The CARES Act waives the 2020 RMD, but IRA owners or beneficiaries may always withdraw money from their IRAs or Inherited IRAs as needed. The 2020 RMD waiver simply means that they aren't required to take a minimum distribution in 2020.

Q: What if an IRA owner has already taken his 2020 RMD?
A: If an IRA owner took a distribution in 2020, he may be able to roll over the distribution, but only if it is within 60 days of receiving the distribution, and if all of the other rollover requirements are met.

Q: Our credit union furnished an RMD statement to IRA owners in January, explaining that they were required to take an RMD from their IRAs. Do we need to issue a corrected RMD statement as a result of the 2020 RMD waiver?
A: No, not unless you provided an RMD statement to an IRA owner who will attain age 70½ in 2020. According to Notice 2020-6, you must notify these IRA owners by April 15, 2020, that a 2020 RMD is not due. This is a result of the SECURE Act increasing the age when RMDs must begin from age 70½ to age 72.

For more information about the 2020 RMD waiver contact your IRA servicer.

Source:  CUNA’s Compliance Blog, April 1, 2020. 


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