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Due date to complete some IRA rollovers is extended

Notice 2020-23 includes an extension to July 15, 2020 of a host of administrative acts.

“The Secretary of the Treasury has also determined that any person performing a time-sensitive action listed in either § 301.7508A-1(c)(1)(iv)-(vi) of the Procedure and Administrative Regulations or Revenue Procedure 2018-58, 2018-50 IRB 990 (December 10, 2018) which is due to be performed on or after April 1, 2020 and before July 15, 2020 (Specified Time-Sensitive Action), is an Affected Taxpayer.”

Two of the specified acts include:

(1) An eligible rollover distribution that may be rolled over to an eligible retirement plan, including an IRA no later than the 60th day following the day the distribute received the distributed property (Rev. Proc. 2018-58, Section 8, item 23), and

(2) An individual with excess deferrals for a taxable year must notify a plan not later than March 1 following the taxable year that excess deferrals have been contributed to the plan for the taxable year.  A distribution of excess deferrals identified by the individual, plus income attributable to the excess through the end of the taxable year, must be made no later than the first taxable year of the excess (Rev. Proc. 2018-58, Section 8, item 25.)

Therefore, rollovers of IRA distributions made after January 31, 2020 to May 16, 2020 may be completed by July 15, 2020.  (Watch for more IRS announcements relating to retirement plan distributions.)  (Remember distributions from inherited IRAs that have a nonspouse beneficiary aren’t eligible for rollovers.)

Excess deferrals for 2019 contributed to a qualified retirement plan or IRA should be distributed by the plan by July 15, 2020.

Here is a URL for Notice 2020-23.

Here is a URL for Revenue Procedure 2018-58.

Here is a URL for Regulations § 301.7508-1.

Tax and financial advice from the Silicon Valley expert.