CARES Act – Waiver of 2020 Required Minimum Distributions

The CARES Act Waives 2020 RMDs For Individuals

coins spilling from mason jar

As many of you are aware, the Coronavirus Aid, Relief, and Economic Security, or “CARES Act”—the third emergency bill that Congress has passed in response to the novel coronavirus (COVID-19) pandemic—was signed into law on Friday, March 27, 2020.

One of the tax relief items the CARES Act provides, that will affect many individuals in their retirement and estate planning, is the waiver of required minimum distributions (“RMDs”) for the 2020 calendar year.

An RMD is the amount of money that is required to be withdrawn by the account owner of a traditional IRA, qualified account, when the account owner reaches a certain age; and by the beneficiary of an inherited IRA, qualified account; the timing of which may be governed under pre-or post-SECURE Act rules depending on the date of death of the participant plan owner.

Who Qualifies For the RMD Waiver?

The main takeaway here is that The CARES Act waives RMDs for individuals for the 2020 calendar year. Note that this waiver of RMDs for 2020 is not limited to those who are affected by COVID-19.

The waiver of RMDs applies to the following:

  • any account owner who is 72 or older in 2020;
  • any account owner who turned 70 ½ in 2019, and did not take his or her RMDs in 2019 and planned to take his or her delayed RMDs by April 1, 2020, and
  • all beneficiaries of inherited IRAs for decedents who died before 2020.

What If I Have Already Taken an RMD Withdrawal?

If you choose to make a withdrawal from your qualified account, please keep in mind that any withdrawal from your IRA in 2020 is no longer deemed to be an RMD because of the RMD waiver in the CARES Act.

Please note that if you already have taken a withdrawal in 2020 to satisfy what would have been the RMD, you may now transfer that money back into the IRA within a 60-day rollover period of taking the withdrawal. If more than 60 days have elapsed since the withdrawal was taken, you will need to obtain a waiver of the 60-day rollover period to transfer the money back into the IRA. Also, a beneficiary may not return funds to an inherited IRA.

How Can I Obtain a Waiver of the 60-day Rollover Requirement?

According to IRS publications, there are three ways to obtain a waiver of the 60-day rollover requirement:

  1. You qualify for an automatic waiver – according to the following guidelines:
    • The financial institution receives the funds on your behalf before the end of the 60-day rollover period.
    • You followed all of the procedures set by the financial institution for depositing the funds into an IRA or other eligible retirement plan within the 60-day rollover period (including giving instructions to deposit the funds into a plan or IRA).
    • The funds are not deposited into a plan or IRA within the 60-day rollover period solely because of an error on the part of the financial institution.
    • The funds are deposited into a plan or IRA within one year from the beginning of the 60-day rollover period.
    • It would have been a valid rollover if the financial institution had deposited the funds as instructed.
  2. You request and receive a private letter ruling granting a waiver, or
  3. You self-certified that you met the requirements of a waiver and the IRS determines during an audit of your income tax return that you qualify for a waiver.

Opportunities For Tax Planning Strategies

It may be helpful for those individuals who anticipate a certain level of taxable income for 2020 to take advantage of tax-exempt planning strategies by converting the funds they were going to take as their 2020 RMD to a Roth IRA.

If you have questions about the 2020 RMD waiver and how it impacts you and your estate planning, please do not hesitate to contact Charles B. Hadad, Esquire of The Lynch Law Group to schedule a conference call at your convenience. .

Pittsburgh Estates and Trusts Attorneys

Chuck Hadad is a partner at The Lynch Law Group. He assists clients with estate planning, probate, and estate administration matters.  Contact Chuck at (724) 776-8000 or email him directly at

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