If you have taken a distribution from your IRA or other qualified retirement plan for 2009 that you did not want, read this article before it’s too late!
Most IRA owners are aware that the IRS waived the Required Minimum Distribution (RMD) for 2009 on December 23, 2008. If you did not know this, read the article titled “Required Minimum Distributions Suspended for 2009 IRA.”
Since this exception was implemented with so little notice, many IRA custodians and other employer retirement plans were unable to make the necessary adjustments in time to keep the RMDs from going to the qualifying individuals. Therefore, many folks received a distribution from their IRA even though they were not required to. Because there was so much confusion surrounding this issue, many of these recipients just accepted the fact that there was nothing they could do about it except pay the tax.
The good news is that the IRS has recently released NOTICE 2009-82 which gives some relief to those who took a required minimum distribution for 2009 that they did not want. In case you are the type of person who would like to read all twelve pages of technical jargon that the IRS includes in what should be a very simple notice, go to http://www.irs.gov/pub/irs-drop/n-09-82.pdf.
For the rest of you, here is the one paragraph of this twelve-page document that is relevant:
“Rollover relief for IRAs. In the case of IRA owners who have already received distributions of 2009 RMDs in 2009, the Service, under the authority of § 408(d)(3)(I), is hereby extending the 60-day rollover period for any such distribution so that it ends no earlier than November 30, 2009. However, because of the one-rollover-per-year rule in § 408(d)(3), which was unchanged by WRERA, no more than one distribution from an IRA in 2009 will be eligible for this rollover relief.”
Simply stated, if you have previously taken your RMD for 2009 for whatever reason, you can roll those funds into the same IRA that they came from or another IRA without violating any rules—and you have until November 30, 2009 to do so. However, if you are in the process of executing a rollover under the 60-day rule and the 60 days takes you beyond November 30, 2009, then you still have the full 60 days to complete your rollover. As long as the funds are deposited into an IRA no later than November 30, 2009, or 60 days from the date of withdrawal, they will be considered as an eligible rollover and are not taxable.
