CARES Act: Changes to Tax Filing, Required Minimum Distributions

April 9, 2020 | Josh Zorger, CFP®, Fortitude Private Wealth

The Coronavirus Aid, Relief and Economic Security Act, known as the CARES Act, was signed into law on March 27, 2020. Though there are several specifics that will affect businesses in the CARES Act, I would encourage these items be discussed with your tax preparer or CPA. I will highlight changes to tax filing deadlines and IRA distribution rules below.

The due date for tax filing your Federal Tax Return has been extended to July 15, 2020. This will also be the deadline for making IRA and Roth IRA Contributions. The deadlines for both the first and second quarter federal income tax estimated payments have also been postponed until July 15. Most states, including Indiana, have also extended the filing deadlines. To check with your specific state, please click here

The CARES Act has also waived the Required Minimum Distribution (RMD) requirement on IRA Accounts for 2020. This waiver also includes RMD’s on Inherited IRA Accounts for 2020. If you have already taken an RMD for 2020 and want to reverse it, you may be able to roll the money back into your IRA. According to the new IRS Notice 2020-23, if the distribution was taken on or after February 1, 2020, the IRA owner has an extension until July 15, 2020, to complete their 60-day rollover. This is assuming that they have not already completed a 60-day rollover in the past year, as current law only permits one IRA-to-IRA rollover in a 12-month period (this law excludes Trustee-to-Trustee direct transfers between IRA Accounts). This rollover extension does not apply to Inherited IRA Accounts.

This information should be used for educational purposes only and is not intended to be specific investment planning, retirement planning or tax planning advice. We recommend that you consult with a professional tax advisor or qualified plan consultant before implementing any of the options presented. 

Josh Zorger, CFP®, is the founder and president of Fortitude Private Wealth in Carmel, IN.

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