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No Required RMDs for 2020

Required Minimum Distributions (RMDs) are generally required to start from an employer retirement plan or IRA by April 1 of the year after the plan participant or IRA owner reaches age 70½ (age 72 for those who reach age 70½ after 2019). These required distributions continue throughout the life of the individual.

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However, due to CARES Act provisions, RMDs are not required in 2020 from IRAs and defined contribution plans (other than Section 457 plans for nongovernmental tax-exempt organizations). This exclusion also includes any first-time RMDs for 2019 with an April 1, 2020, required beginning distribution date. This one-year suspension does not generally affect how RMDs are determined after 2020; the pre-CARES Act provisions will apply unless there is additional legislation.

ROLLOVER TREATMENT: If an individual receives a 2020 RMD payout, there is a 60-day window to return the distribution and treat it as a rollover, thus avoiding taxes on what would have been a taxable payout. A special provision included in the CARES Act allows for an extension of this 60-day window. If the 60 days would have expired on or after April 1, the rollover deadline is extended until July 15.

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