The Worker, Retiree and Employer Recovery Act of 2008 suspended required minimum distributions (RMD) from IRAs or certain retirement plans for 2009.
But what happens if you already took the money out and no longer need it? The change was signed into law late in 2008, so there’s a chance some folks missed the news and have already taken their RMD for 2009.
According to IRS Notice 2009-82, as long as you roll over the distribution by November 30, 2009, it will be treated as tax-free. Note this also extends the normal 60-day rollover period, so even if you took the distribution in early 2009 you may qualify.
This could be a good planning opportunity to postpone a good chunk of income tax. As an example, a taxpayer puts the money back in his IRA and redistributes it early in 2010. Not only does this defer the tax on the distribution into 2010, but it may satisfy all (or a sizable) amount of his 2010 RMD.
Please contact me if you have any questions or think this strategy could benefit you personally.
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