Minimum Distribution Rules Affected by CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law by the President on March 27, 2020, waives the minimum distribution rules for calendar year 2020 for IRAs and certain defined contribution plans.

 

The waiver does not apply to required beginning dates in calendar years after 2020, and amounts which would otherwise be required to be distributed are not eligible rollover distributions.  For distributions to be made over a 5-year period that includes calendar year 2020, calculations of the distribution period may disregard calendar year 2020. 

Plan amendments to comply with this provision must be made on or before the last day of the first plan year beginning on or after January 1, 2022 (January 1, 2024 for governmental plans). Plans operated in accordance with these changes between the amendment’s effective date and December 31, 2020, will not to be deemed to have a plan qualification failure, or an anti-cutback rule failure, under §411(d)(6). 

If you have any questions about the CARES Act or any other legal issues, please contact one of our Trusts & Estates and/or Tax Group attorneys.  Our physical office is currently closed pursuant to the Governor’s Business Closure Order, but MacDonald Illig attorneys are working remotely and are available at any time via e-mail or cell phone to assist you.