CARES Act Clarification on IRA Distributions Announced

On March 27, 2020, President Trump signed the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law. The 880-page Act included multiple provisions that impact Argent clients, but at the time of its signing did not address “undoing” individual retirement account (IRA) required minimum distributions already taken in 2020.

On April 9, 2020, IRS guidance (IRS Notice 2020-23) was released allowing IRA required minimum distributions taken between Feb. 1, 2020 and May 15, 2020 to be rolled back into the IRA if the rollover was completed by July 15, 2020.

On June 23, 2020, the IRS released guidance (IRS Notice 2020-51) that addressed further concerns over IRA required minimum distributions (RMDs) and amended previous guidance. Noteworthy changes include:

All RMDs taken in 2020 – including in January – are eligible to be re-contributed to the IRA by August 31, 2020;

Normally, re-contributions above would count as a rollover, but under the new guidance, RMDs re-contributed to an IRA in 2020 will not be treated as a rollover for purposes of the one rollover per 12 month period rule; and

Inherited IRA required minimum distributions are eligible to be re-contributed back into the Inherited IRA.

It is important to know that this new guidance is subject to change. It is possible the IRS will further relax or waive the rules on returning 2020 IRARMDs. We will update this article as the IRS issues further guidance. Meanwhile, please contact your Argent relationship manager if you have any questions about this new guidance or want to learn how the CARES Act could impact your financial assets.

About

Argent Financial Group

Argent Financial Group (Argent) is a leading, independent, fiduciary wealth management firm. Responsible for more than $30 billion in client assets, Argent provides individuals, families, businesses and institutions with a broad range of wealth management services, including trust and estate administration, investment management, ESOPs, retirement plan consulting, funeral and cemetery trusts, charitable organization administration, oil and gas (mineral) management and other unique financial services. Headquartered in Ruston, Louisiana, Argent was formed in 1990 and traces its roots back to 1930.

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