2020 RMDs Waived for Retirement Accounts

2020 RMDs Waived for Retirement Accounts

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed by President Trump to help provide financial stability and relief for individuals and businesses affected by COVID-19. The bill is very broad and addresses a number of areas and industries, and many of the specific details will still need to be analyzed.

To qualify for COVID-19 relief in the area of retirement accounts, there are “COVID-19 qualifying criteria” that apply with the exception of the 2020 RMD Waiver for Retirement Accounts highlighted below. The criteria to qualify for the retirement provisions of the CARES Act include a diagnosis of COVID-19, have a spouse or dependent who is diagnosed with COVID-19, or experience adverse financial consequences as a result of COVID-19 including quarantines, layoffs, business closures or child care responsibilities.

Following are the highlights of The CARES Act with regard to Retirement Accounts:

2020 Required Minimum Distributions Waived for Retirement Accounts With the exception of defined benefit plans, required minimum distributions (RMDs) are waived for all employer plans and IRAs in 2020, including inherited accounts. This provision also applies to RMDs due in 2020 but attributable to 2019. Distributions must be taken on or after January 1, 2020 and before December 31, 2020 to qualify. As mentioned above, individuals do not need to meet COVID-19 qualifying criteria to waive RMDs for 2020.

2020 Distributions can be “Rolled Back” Additionally, retirement account holders have the option to roll the distributions back into any retirement account eligible to receive a rollover for up to three years. Distributions may be rolled back in one or more transactions, and the rollovers do not count toward the one rollover per 12-month rule. This applies to inherited and successor IRA accounts.

Elimination of Early Withdrawal Penalty This waives the 10% early withdrawal penalty for withdrawals up to $100,000 from qualified retirement accounts, including IRAs and 401(k) plans, for retirement plan participants who qualify for COVID-19 relief. Income tax on the distribution would still be owed but could be paid over a three-year period.

Increase in the Retirement Plan Loan Amount This provision increases the amount that can be taken as a loan from a qualified retirement plan from $50,000 to $100,000 for 2020.

As with any decision involving taxes, consult your tax professional on considerations and impacts to your specific situation. This excerpt is from a highlight of the CARES Act provided by Jeff Moore, Financial Advisor of Edward Jones in Dallas, GA. 770-443-2844.

Hear From Our Clients

“On the threshold of retirement, we finally decided to quit thinking we could self-prepare the requisite documents. We had previously had only a very simple will. We needed the necessary legal (including updated will) & health care docs but didn’t want to deal with the time & complication of legalese. Cindy made the process relatively painless. She took the time to explain and answer questions without trying to upsell services. We were done in 2 meetings plus the reading of emailed drafts. In addition to preparing the documents, Nelson Eldercare will be there when our adult children need advice on executing the plans we’ve put in place.So glad it’s behind us and would recommend Cindy and her helpful staff.”

- Bonnie

Cindy and her company treat their clients like family. Nelson’s offers clear, direct, and honest guidance in planning for your families security and future. No one wants to actively sit down and make these decisions, but Nelson’s makes this process seamless. I was so impressed with their willingness to answer all questions big or small. So glad I made the decision have them help my mom and dad and now me. You can’t go wrong with Nelson’s Elder Care Law.

- Hope

The very best elder law attorney and staff anyone could ever ask for! I have referred a number of clients to Cindy and she never disappoints. She is kind, caring, and extremely thorough in making sure everything is completed as it should be. I highly recommend Cindy for anyone needing lawyer services; she truly goes above and beyond for every client she helps and has had a huge impact in so many peoples’ lives. Thank you, Cindy and staff, for everything that you do- I’m so glad to know you!

- Kerri

I heard Cindy’s presentation at a Senior Luncheon at my church, and was very impressed. She helped my daughter and me understand many aspects of elder law. Josh has also been very helpful in my planning to enter an independent living situation . I have told many friends about them.

- Charlotte

Cindy and the Nelson Elder Care Law team are trustworthy and helpful. They are the experts in elder care law. At Leaf Cremation, we entrust our families to the care of the Nelson team when their services are needed.

- Pierce