The CARES Act (Coronavirus Aid, Relief, and Economic Security )waives 2020 required minimum distributions (RMDs) from solo 401k plans.
The Nitty-gritty
Solo 401k participants including beneficiaries, will not be required to take a 2020 RMD from their solo 401k plans, or inherited solo 401k plans.
The solo 401k RMD waiver also applies to account owners who reached age 70½ in 2019, but did not take their RMDs in that year.
For those solo 401k participants who already took the RMD in 2020, they have the option to roll those funds back to the solo 401k plan or to an IRA provided the following requirements are met.
The Nitty-gritty
Solo 401k participants including beneficiaries, will not be required to take a 2020 RMD from their solo 401k plans, or inherited solo 401k plans.
The solo 401k RMD waiver also applies to account owners who reached age 70½ in 2019, but did not take their RMDs in that year.
For those solo 401k participants who already took the RMD in 2020, they have the option to roll those funds back to the solo 401k plan or to an IRA provided the following requirements are met.
- it is within 60 days of the date of receipt of the distribution, or,
- if the 60th day falls anywhere between April 1, 2020, and July 15, 2020, the distribution is rolled over by July 15, 2020.
Note that the IRS may provide further guidance on the above 60 day rollover period, and, if they do, it will be sometime in 2020 or early 2021.
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