Can my IRA benefit from COVID-related tax changes?


Q. I understand the IRS is waiving required distributions for 2020. I am 73 and I took my required distribution from my IRA in January 2020, before all this COVID mess started. Will I be able to carry over this distribution and claim it on my 2021 tax return instead of claiming it on my 2020 tax return?
— Investor

A. You’re correct that under the CARES Act coronavirus relief bill, people didn’t have to take a Required Minimum Distribution (RMD) for tax year 2020.

But based on your timing, it’s too late for you to make any changes.

The deadline to repay or roll over the pre-COVID 2020 RMDs was Aug. 31, 2020, said Mary Ford, a certified public accountant with Sobel & Co. in Livingston.

“If you did not roll over the previous distributed funds by that deadline you cannot carry over that distribution and report it as income in 2021,” Ford said.

She said it’s very important to note that you will receive a 2020 form 1099R for all distributions taken in 2020 even if you had re-paid the distribution within the prescribed period — 60 days or prior to Aug. 31, 2020.

“Be sure to inform your tax preparer if you rolled over your RMD into an IRA to ensure the tax amount is properly reduced on your form 1040,” she said.

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This story was originally published on Jan. 19, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.