Rollback of 2020 RMD.

Home Fairmark Forum Retirement Savings and Benefits Rollback of 2020 RMD.

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  • #7729
    Howard16
    Participant

    On March 16,2020, I took a distribution of $63,500.00 from my traditional IRA (I’m 71 years old.) This amount was $46.68 over my 2020 RMD of $63,453.32. On July 31,2020 I rolled back the $63,500.00 into my traditional IRA. Will I have any tax problems because I rolled back $63,500.00 instead of $63,453.32? Many thanks.

    #7731
    Alan S.
    Participant

    You can only roll back the RMD amount. The extra 46.68 will be an excess contribution to your IRA and must be removed as such.

    I assume you reached 70.5 in 2019, right? If so, did you complete your entire 2019 RMD in 2019?

    #7732
    Howard16
    Participant

    I reached 70.5 in 2019, and I did complete my entire 2019 RMD in the calendar year 2019. About one hour ago I contacted my IRA trustee who will treat the $46.68 as an excess contribution and will return it to me. I hope that the IRS will understand the flow of numbers and not assess me any penalties. Thank you, and stay well.

    #7733
    Alan S.
    Participant

    There might be a few bucks of earnings distributed with the 46.68 which will show up in Box 2a of the 1099R. Such earnings will be taxable on your 2020 return.

    You will report only the 63,453 as a rollover on line 4b of Form 1040 leaving 47 as taxable in addition to the earnings mentioned above. There will not be any penalty, but you should include an explanatory statement with your return regarding the corrective distribution as is the case for any corrective distribution.

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