By NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — The Internal Revenue Service wants to let seniors know that if they don't need their retirement money right away, they don't have to take it out this year.
"Normally, once you reach the age of 72 and a half, you have to start taking money out of retirement accounts," said spokesman Michael Devine. "Those are traditional IRA's and 401(k) plans and those kind of things, but the CARES Act has waived the Required Minimum Distribution for 2020 for most plans."
If you've already taken the distribution, you can reverse that.
"You have the option to put it back before the end of August," Devine said. "That way, you won't have to pay tax on the money that you've taken out of your retirement account."
There is usually a significant penalty if RMDs are not taken, but that's not true this year.
"Normally, if you don't take that money out, there's a 50% penalty for not taking out a Required Minimum Distribution," Devine said. "Your money can't sit in a retirement account forever, so you have to take it out, but the rules have changed for 2020. If you've got a retirement account and you're a senior citizen, you probably want to check into that."
IRS Notice 2020-51 also provides that the one rollover per 12-month period limitation and the restriction on rollovers to inherited IRAs do not apply to a repayment in this case.