Reply To: 2020 RMD

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Alan S.

With respect to the “one rollover limit does not apply” I was replying to someone wanting to convert the distributions to Roth, not roll them back to a TIRA, so that would be correct.

The CARES Act also specifies that if a distribution qualifies as CV related, it can be rolled back anytime in the following 3 years, and that all such rollovers will be treated as “direct trustee to trustee transfers” made within 60 days, and that eliminates the one rollover limitation.

However, if a 2020 “RMD” distribution does not qualify as CV related, is not converted, and Congress does not pass additional relief from the one rollover rule, then only one such distribution could be rolled back. The IRS does not have the authority to waive the one rollover limit, but they could certainly propose a technical corrections provision to Congress to address the one rollover issue. Note that the one rollover problem is more acute now than in 2009 as well since the rollover limitation applied to each separate account back then, but now to all IRA accounts.

This rollback problem particularly impacts those who set up monthly RMD service distributions with their custodian, and now have 3 distributions to deal with.

  • This reply was modified 1 year, 9 months ago by Alan S..