By NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Those who don't need their retirement money this year have a short time to put it back.
"The IRS is reminding owners and beneficiaries of IRAs and retirement plans who have taken a required minimum distribution or RMD this year that they have an option to return it to that original plan or roll it over into another qualified plan," said spokesperson Michael Devine. "That deadline is August 31."
That would mean you don't have to pay tax on it this year.
"Normally, once you take out that RMD, you have to pay tax on it," Devine said. "What's even worse is that, if you don't take out a required minimum distribution, the penalty is 50% of what you should have taken out. The CARES Act, for this year only, waives that."
This waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020.
"If you haven't talked to your plan manager about returning or rolling over the required minimum distribution, you need to do that very quickly," Devine said. "It probably takes time to make that happen."
The CARES Act provisions apply to most retirement plans, including traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, profit sharing plans and other defined contribution plans.