Stay informed on the latest tax and employment legislation updates during the Coronavirus outbreak.
Required Minimum Distributions Suspended
The Coronavirus Aid, Relief and Economic Security Act (CARES Act) provides that 2020 required minimum distributions (RMD’s), including distributions for a required beginning date in 2020 and distributions for a required beginning date in 2019 that have not yet been made in 2020, are waived for qualified plans and IRA’s.
This is primarily due to the decimated market values.
RMDs for participants who turned age 70-1/2 in 2019 and have not yet received their 2019 distribution also may be waived.
Beginning in 2020, the SECURE Act changed the new age at which RMDs must start to age 72. The increase in age does not apply to individuals who turned 70 ½ in 2019.
Qualified Charitable Distributions (QDCs) from IRAs are not affected by the SECURE Act; as a result, QCDs may still be taken from IRAs as early as age 70 ½ in 2020 and later.
The income qualification for the $1,200/$2,400 cash payments from the government will be based upon 2020 income. If you waive any unpaid RMD’s from 2019 or your 2020 RMD’s, this may help get you below the $75,000/$150,000 thereby avoid a cutback in the tax credits allowed on your 2020 return.
If you have questions or need assistance to implement any of the provisions of this legislation, please don’t hesitate to contact any KRD team member. We will certainly do our best to help explain its provisions and how it impacts your specific situation.