The IRS has issued a clarification on the notifications about required minimum distributions that must be provided to IRA owners who will turn 70½ in 2020, in light of the provisions of the SECURE Act.
Under the SECURE Act, the new required beginning date for an RMD for an IRA owner is April 1 of the calendar year following that in which the individual attains age 72, not age 70½. Thus, notifications concerning RMDs for those who will turn 70½ in 2020 are no longer due on Jan. 31, 2020.
The IRS says that it recognizes that financial institutions have had only a short amount of time after the enactment of the SECURE Act on Dec. 20, 2019 to change their systems for furnishing the RMD statement. In Notice 2020-6, the IRS says that if an RMD statement is, or already has been, provided for 2020 to an IRA owner who will reach age 70½ in 2020, the IRS will not consider that statement to be incorrect – as long as the financial institution notifies the IRA owner no later than April 15, 2020, that no RMD is due for 2020.
Notice 2020-6 notes that the SECURE Act did not change the required beginning date for IRA owners who reached age 70½ before Jan. 1, 2020. It also encourages – but does not require – financial institutions to remind IRA owners who reached 70½ in 2019 and have not yet taken their 2019 RMDs that they still must take those distributions by April 1, 2020.
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