What You Should Know about Required Minimum Distributions (RMDs) in 2020

RMD –REQUIRED MINIMUM DISTRIBUTIONS. The coronavirus stimulus bill suspended the RMD requirement for this year.  But what if you already took your RMD for 2020, and now you wish you hadn’t?
RMD distributions are the government’s way of getting their hands on some of the money that has grown tax-deferred for sometimes decades in your 401K or IRA.  The new RMD age when you need to start withdrawing the money was pushed out to age 72 from 70 1/2 last year for folks who had not yet begun their distributions.  Unrelated to the CARES Act, there is a permanent rule on the IRS books that allows a withdrawal from a retirement account to be “rolled over” within 60 days without any tax consequence.  In the case of an RMD, you could do the rollover back into the account you withdrew it from, or move the money into another retirement account.
Are you already past the 60 day window?  You can return the money if you have been directly impacted by COVID-19. The expectation is that the IRS will soon release guidelines that may make it possible for anyone to return an RMD taken out in January or February, regardless of whether they’ve been affected by the Coronavirus or not. Remember you will need to repay the entire distribution.  If you already took a 2020 RMD distribution, you likely had taxes withheld.  If you intend to return the money to a retirement account, you need to repay the entire amount, not just what landed in your pocket.  For example, if you took $10,000 and had $1,000 in taxes withheld the net you received was $9,000.  You will need to repay the entire $10,000 into a retirement account