CARES Act Clarification on IRA Distributions Announced

On March 27, 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 will impact Argent Financial Group clients, but at the time of its signing did not address “undoing” 2020 individual retirement account (IRA) distributions already taken.

On April 9, 2020, IRS guidance (IRS Notice 2020-23) was released allowing IRA 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, but with the following caveats:

Distributions taken in January 2020 are not eligible for this extension.

IRA distributions can only be rolled back into an IRA once every 365 days. If funds have been distributed and rolled them back into an IRA within the 365 days preceding the date of the most recent distribution, then the most recent distribution will not be eligible for a rollover.

Inherited IRA distributions cannot be rolled back into the IRA.

Any taxes withheld from distributions made in 2020 and subsequently rolled back into the IRA will not be returned, but will instead be applied against the 2020 tax return.

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 IRA distributions. We will update this article if the IRS changes its guidance. Meanwhile, please contact your Argent relationship manager if you have any questions about the new guidance or want to learn how the CARES Act could impact your financial assets.

About

Argent Financial Group

Celebrating its 30th anniversary in 2020, 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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