Updated IRS Guidelines for 2020 RMD Waiver

July 27, 2020

Note: This blog post is directed to those who are of Required Minimum Distribution age in 2020 (i.e., those who turned 70 ½ in 2019), as well as those who have Beneficiary IRAs.


When the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March of this year, Required Minimum Distributions (RMDs) became waived for the year 2020.

However, the legislation raised more questions than it answered. The early birds who took their RMDs in January seemed to be excluded from the RMD waiver, and Beneficiary IRA holders who had already taken their RMD anytime before the CARES Act passed also seemed to be excluded.

The new Internal Revenue Service guidelines released on June 23rd clear up these and other questions regarding the 2020 RMD waiver.1

Any distribution taken on or after January 1, 2020 that would have counted towards the now-waived RMD (including Beneficiary IRA RMDs) can be returned to the account.

The June guidelines also announced that the deadline to return any unwanted RMD taken at any time in 2020 is extended to August 31, 2020, or 60 days after receipt of the distribution, whichever is later. If you had already taken your RMD in 2020, and you have determined that this RMD is not wanted, please contact our office before August 31st to initiate a return contribution of your unwanted RMD.

Whether you should return an unwanted RMD is another matter. For some people, it might be a good idea to retain the not-required distribution, especially if they are in a low tax bracket in 2020. For those who wish to reduce income for the year to reach a lower tax bracket, returning the unwanted RMD may be the best course of action.

One additional option for traditional IRA owners who have taken an unwanted RMD this year is to convert this distribution to a Roth IRA. Roth conversions are taxable, and in this case would need to be done before August 31st. Note that this option is not available to Beneficiary IRA holders.3


Here we answer some frequently asked questions about the RMD waiver, according to the June IRS guidelines:

  1. What are my options if I have already taken my RMD in 2020?
    1. If you took your full or a partial amount of your RMD at any time on or after January 1st 2020, you can a) take no action if you needed or wanted the distribution or b) return any amount (up to the total of what would have been your 2020 RMD) of the unwanted distribution back into your account at any time before the August 31, 2020 deadline.
  2. What if I took more than my RMD amount for 2020?
    1. Only the amount that would have counted towards the now-waived 2020 RMD can be returned before the August 31st
  3. Can a Beneficiary IRA holder return an unwanted RMD?
    1. Normally, 60-day rollovers cannot be done for Beneficiary IRAs, but this rule can be ignored for the year 2020. If a Beneficiary IRA holder took an unwanted RMD at any time in 2020, they can return the distribution before August 31st.
  4. What if I have already done a 60-day rollover in the past 12 months? Isn’t there a limit of one 60-day rollover per year?
    1. The IRS is not including returns of unwanted RMDs in the once-per-year 60-day rollover rule. So even if you have done a 60-day rollover in the past year (not RMD-related), you can return your unwanted RMD to your account any time before August 31st.
  5. What if I take monthly distributions to complete my RMD? What are my options?
    1. Monthly distributions taken in 2020 can be returned to the account in a lump sum one-time transaction, or in multiple transactions, any time before August 31st. The return contribution(s) can be in any amount up to the total 2020 RMD amount taken year-to-date.
  6. Does this waiver and rollover rule include RMDs taken from 401ks and other non-IRA retirement plans?
    1. Yes, the Notice 2020-51 specifies that this waiver and rollover rule applies to Defined Contribution Plans. However, these rules do not apply to Defined Benefit Plans.
  7. What if I complete a rollover of my unwanted RMD, and when I report this for my 2020 taxes, the IRS says this is not allowed?
    1. Financial Plans & Strategies keeps records of all clients’ RMD amounts for each year. If the IRS questions your unwanted RMD rollover when you file your 2020 taxes, we can provide the amount of the 2020 waived RMD and refer to IRS Notice 2020-51 that the rollover is allowed.
  8. What will happen with 2021 RMDs?
    1. You should plan to have to take a Required Minimum Distribution in 2021 if you turned 70 ½ in 2019 or earlier or 72 in 2020 or later. Note that if you decided not to take what would have been your RMD in 2020, it is possible that your 2021 RMD will be a higher amount.
  9. What if I have made a Qualified Charitable Distribution (QCD) in 2020?
    1. QCDs are related to RMDs in that they count towards an RMD, but you can still make QCDs at any point after age 70 ½, even if RMDs are waived. These still count as non-taxable distributions to charity.


If you have any other questions about the 2020 RMD waiver and the rollover (return of distribution) rules, or if you wish to return an unwanted RMD, please call our office at 317-882.7675.



  1. Internal Revenue Service. “Notice 2020-51.” June 23, 2020. https://www.irs.gov/pub/irs-drop/n-20-51.pdf
  2. com. “New Rollover Rules For Unwanted 2020 RMDs Under IRS Notice 2020-51… Welcome Relief And A Troubling Precedent.” June 25, 2020. https://www.kitces.com/blog/irs-notice-2020-51-unwanted-rmd-rollover-relief-beneficiary-inherited-ira-precedent/
  3. Financial Planning Magazine. “A CARES Act RMD bonus for retirement savers.” Ed Slott. July 10, 2020. https://www.financial-planning.com/news/cares-act-retirement-planning-bonus-unwanted-rmds-can-be-returned