To Our Valued Clients,

On March 27, 2020, President Trump signed the CARES Act into law. This financial package provides economic stimulus for individuals and businesses and includes a few provisions that affect retirement plans:

  • Required Minimum Distributions (RMD) are suspended for 2020, including those from inherited IRAs.
    • This is not a deferral and there will be no need to make up the 2020 RMD in future tax years.
  • If RMD distributions have already been made during 2020, they may be redeposited to the IRA within 60 days of the distribution without the distribution being reported to the IRS on a 1099R.
    • For example, if a client received a $2,000 distribution on February 1, 2020, the client has until April 1, 2020 (60 days) to return the distribution to their IRA.
  • The deadline for making a 2019 contribution to an IRA is extended from April 15, 2020 to July 15, 2020 (the new IRS income tax filing deadline).
  • The 10% Early Withdrawal Penalty is waived for 2020 for amounts up to $100,000.
 

The Act impacts people in many different ways, especially those that are in Required Minimum Distribution mode. It is therefore important for you to discuss your specific situation with us. We welcome the opportunity to discuss specific planning situations with you, including changes to your cash flow and charitable giving. Should you have any questions about the Act or situations specific to you, please contact your Relationship Manager.

Thank you and please stay safe.

David                                              
David G. Strachan, Jr.
Senior Vice President, Director of Relationship Management