The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was signed into action on March 27, 2020. Individual Retirement Accounts (IRAs) were among the different financial tools covered within the Act, specifically relating to the 2020 required minimum distribution (RMD). 

A provision of the CARES Act waives IRA required minimum distributions (RMDs) for calendar year 2020. This essentially means that IRA owners and IRA beneficiaries are not required to take a distribution from any traditional (including simplified employee pension – SEP) or Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA.  

This includes IRA owners who have their annual RMD set to automatically distribute. If you believe that is the case for your IRA, please let us know if you want the 2020 distribution to be withdrawn as scheduled. If we do not hear from you, we will assume that you want the 2020 RMD to take place even though it is not required by law. If you have already takenyour 2020 RMD please contact your tax professional about the possibility of returning the funds as a rollover contribution.

If you are the beneficiary of an IRA, whether it be a traditional, Roth, or SIMPLE IRA, you are also not required to take an RMD for 2020. If you are the surviving spouse beneficiary you may have the ability to return the funds as a rollover contribution. Please check with your tax professional about the possibility of doing so.

This information has been provided on behalf of Wolters Kluwer Financial Services. The Peoples State Bank is not a financial adviser. We suggest you speak with a tax professional on all matters related to your taxes and tax preparation.