(602) 697-3890 Jerry@JGMFinancial.org

By Ian Berger, JD
IRA Analyst

Question:

I can’t find the answer to this question anywhere, so I thought I’d go straight to the experts.

Does the CARES Act waive the requirement for a surviving spouse to distribute the RMD in 2020 prior to re-registering the IRA in the surviving spouse’s name? The deceased spouse had reached their required beginning date.

I’ve read Notice 2020-51, but it does not address this issue specifically.

Thanks!

Answer:

Normally, if an RMD is due in the year the IRA owner dies and it had not already been paid to the owner, the beneficiary must take the RMD. That includes surviving spouses. However, because the CARES Act waived 2020 RMDs, year-of-death RMDs for an IRA owner who died in 2020 are not required.

Question:

My client is 85 years old. He took his 2020 RMD on 1/08/2020. He died in April 2020.

Can we put his RMD back into his IRA?

Jay

Answer:

Hi Jay,

Good question! The IRS guidance allowing unwanted RMDs to be repaid by August 31 is very broad. However, it’s not clear the IRS relief would cover this situation. Ultimately, it will be up to the IRA custodian to allow repayment of the RMD. Even if the custodian allows it, returning the RMD could have income tax or estate tax ramifications that should be carefully considered.

https://www.irahelp.com/slottreport/cares-act-and-2020-rmds-todays-slott-report-mailbag