Evans Wealth Management Blog

Articles written by Evans Wealth Management are designed to educate clients & potential clients on concepts important to their financial future.

Recent IRS Change Regarding 2020 RMD Rules

If the Secure Act and CARES Act RMD changes weren’t enough to confuse you, the IRS recently issued further guidance related to 2020 RMDs. This is the second notice issued by the IRS related to RMDs this year. Let’s begin with some background.

On March 27, the CARES Act eliminated RMD’s for 2020. However, many had already taken RMDs prior to its passage. The bill and a subsequent IRS notice allowed certain individuals meeting certain criteria to return the RMDs to the account if they desired. A recent IRS notice extends RMD benefits to a broader audience.

Below is a brief overview of the changes made by IRS Notice 2020-51:

  • It extended the 2020 rollover window to August 31, 2020 and allowed anyone taking an RMD to roll it back into the account.
  • Non-spouse beneficiaries were granted the ability to rollover the RMDs also and the once-per-year rollover rule was suspended for the nonrequired “RMDs.”

The above indicates the IRS has become increasingly relaxed over RMD’s for 2020. If you took RMDs early in the year and don’t need the funds, a short window remains to return the funds to the account reducing your current year tax bill. The deadline to rollover RMDs into the originating account is August 31st.

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