If you missed the news, the IRS announced that if you already took out your maximum percent for your Required Minimum Distribution, you are still in luck. According to the IRS, you can still roll over those funds and put them back into your account. That is according to the current Coronavirus, Aid, Relief and Economic Security (CARES) Act waiver.
This new waiver has been extended until the end of August. That should give you enough time to replenish your accounts before the end of this year, if you choose to.
These updates also include what will happen with your minimum and maximum distributions and rollovers concerning the COVID pandemic. It is important to note that the COVID pandemic is the main reason the CARES Act has been updated. The IRS knows there are a lot of people going through these challenging times and this may help.
Retirement Planning and More
The great thing about the new updates for the CARES Act is that it includes people who are making payments for their 401(k) and 402(b) plans to skip their RMD for right now. Yes, this also includes those who have a traditional IRA account.
This also takes into account those who turned 70 last year. Those who turned 70 last year would have to start their RMDs in April of this year. The only people the new updates do not include are the ones who have defined benefit planning.
The final thing to mention concerns those who take out an RMD under the owner’s plan. He or she also has until August 31, 2020, to put the money back in.
Now, of course, there are some restrictions and requirements you still have to meet. We encourage you to research those yourself.
Four Things You Should Know About The CARES Act Of 2020
1) There is a direct payment to most taxpayers in the sum of $1200. You should have already gotten it via direct bank deposit or mail. There is talk about a second stimulus check coming soon. Several factors are working in favor of this happening. However, several factors are still unknown. We should receive word by the beginning of August if it does happen.
FYI: This will be the last stimulus check you get if it does pass.
2) Unemployment benefits will include an additional $600, but that ends this month.
3) Do you have a retirement plan, including a 401(k)? The CARES Act has updated to include a qualifying loan payment to double to $100,000 if you or a family member contracts COVID. Once again, research this one too to verify that you are included. Borrowing against your 401k is dipping into your retirement funds.
4) As mentioned above, the RMD’s for heirs and beneficiaries are on hold for this year. This includes tax-advantaged Qualified Charitable Deductions (QCDs).
Let us know if you have any questions or if we can help you during this time.