Required minimum distributions are waived for most retirement accounts this year.
Familiarize yourself with the change by reviewing answers to frequently asked questions.
Your advisor is committed to helping you navigate the tax and estate planning aspects with other professionals in these areas.
The CARES Act stimulus package has suspended 2020 required minimum distributions (RMDs) across retirement accounts, including 401(k), IRA, 403(b) and 457(b) accounts.
To help you navigate the tax and estate planning aspects of the change, we’ve compiled answers to the questions our advisors are receiving. Your Ameriprise advisor is committed to supporting you with personalized advice.
What are the criteria to waive RMDs this year?
The RMD waiver applies to everyone with a 401(k), IRA, 403(b) or 457(b) account. Defined benefit pension plans are not eligible.
I’ve already taken my RMD for 2020. What can I do?
You may be able to roll your RMD back into your retirement plan. There are rollover rules you need to be aware of, so you should talk to your advisor about the options.
Could I convert the amount that would have been my RMD to a Roth IRA?
Yes. Amounts that are eligible to roll back into an IRA could alternatively be converted to a Roth IRA. Pre-tax amounts that are converted to a Roth IRA are taxable.
Is there a special procedure to roll over the amount that would have been my RMD?
You only need to indicate that the payment is a rollover. If you decide to convert your IRA distribution to a Roth IRA, you should request the payment be coded as a Roth IRA conversion.
I opted to have federal and/or state taxes withheld from my RMDs. Can I roll the tax withholding back in?
Amounts withheld cannot be reversed. However, you can use your own funds to roll over the equivalent amount of taxes withheld. You would then claim that amount when you file your 2020 tax return next year. The full amount of the distribution, including the tax withholding, must be rolled over to avoid taxes.
I inherited an IRA. Do I have to take my RMD for 2020?
Owners of inherited IRAs may suspend RMDs for 2020.
I’ve already distributed the 2020 RMD from my inherited IRA. Am I able to roll it over?
The CARES Act does not provide rollover relief specific to inherited IRAs. If you are a spouse beneficiary with an inherited IRA and meet the rollover rules, you could roll the funds over to your own IRA.
Non-spouse beneficiaries are not able to roll over an inherited IRA distribution.
Do I have to roll the funds back into the same plan the RMD came from?
No. The money may be rolled into any eligible retirement plan, including an IRA.
We’re here to help
Your Ameriprise advisor can help you understand what the CARES Act means for you and provide personalized advice to adjust your retirement income plans.
Ameriprise Financial cannot guarantee future financial results
Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
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