This post was authored by Salvatore M. Capizzi, Dunham's Chief Sales & Marketing Officer. If you have questions concerning today's topic, please call us at (858) 964 - 0500. Hold us to a higher standard.

On Thursday, April 9, 2020, IRS issued Notice 2020-23, which extended additional key tax deadlines for individuals and businesses. According to Ed Slott, this notice indirectly extended the 60-day rollover rule for IRAs until July 15, but only for distributions taken between Feb. 1 and May 15 of this year.

Notice 2020-23  https://www.irs.gov/newsroom/irs-extends-more-tax-deadlines-to-cover-individuals-trusts-estates-corporations-and-others extends due dates for returns and tax payments not covered in previous notices. The notice generally provides extensions to all taxpayers who have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. This would make the 60 day extension for any RMD taken from February 1 to May 15.

Unfortunately, this also means that Notice 2020-23 does not include a 60 day extension for RMDs taken prior to February 1.

One of the CARES ACT provisions was the waiver of any RMDs from retirement plans and IRAs for tax year 2020.

For those who did take his or her RMD for 2020, the withdrawn amount could be rolled back to the retirement plan or IRA, within 60 days from the date of withdrawal. If the distribution is rolled back to a retirement plan or IRA, the distribution will not be taxable in 2020. This 60 day period is now rolled back to RMDs taken between February 1 and May 15.

However, please keep in mind you can make only one tax-free rollback of an IRA distribution received during any one-year period, meaning that if your IRA client did any traditional or Roth IRA to IRA rollover within the 365 days preceding the receipt of the RMD, they do not qualify for this extension.

One of the items 2020-23 also addressed was the estimated tax payments due June 15, 2020. One of the potential traps of the CARES Act was that the payment deadline for the first-quarter 2020 taxes had been extended to July 15. But payment for the second quarter of 2020 taxes remained due on June 15 and taxpayers could incorrectly assume all 2020 estimates have been postponed. The Notice 2020-23 provides that for your clients, or client’s businesses who have quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, including the June 15 payment, can wait until July 15 to make that payment, without penalty.

We will keep you informed as these types of items continue to unfold.

Above all, please remain safe.

Our Quarter in 2’s, which is a 2-minute recap of the first quarter 2020, is now available. Click here to view the video and click here to find out how it can be customized for your firm.

This document is provided for informational purposes only by Dunham & Associates Investment Counsel, Inc. solely in its capacity as a Registered Investment Adviser and should not be construed as legal and/or tax advice. Dunham & Associates Investment Counsel, Inc. does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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