The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a relief bill passed by Congress in late March 2020 to provide economic relief to Americans during the current pandemic emergency. This bill has suspended the Required Minimum Distributions (RMDs) from retirement accounts for 2020.
Who does this affect?
Anyone with an RMD (Required Minimum Distribution) due in 2020 receives a waiver from that requirement for this year. This affects IRA, 401(k), and 403(b) accounts, as well as beneficiaries of inherited IRAs.
This is a waiver from the requirement. However, you can still take the distribution if you need it for cash flow purposes.
This is a good thing for people who want to avoid losses from having to take an RMD while the market is down. If you are receiving your RMDs through monthly automatic transfers from your IRA to your bank, you may elect to stop those.
What if you already have taken your 2020 RMD?
We are currently awaiting guidance from the IRS for options for those who have already taken 2020 RMDs.
Can RMDs still be used for charitable gifts?
Although the RMDs are waived for 2020, you can still use your IRA distribution amount to give to charity. If the funds are moved directly from your IRA to the charity, they are excluded from your income.
Do you have questions?
Medallion Financial Group is here to assist you with any changes or questions regarding your RMD planning. Please give us a call! 301-990-9704
This information is not intended to be tax advice. Please consult your personal tax consultant to determine the best course of action for your situation.