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IRS: You can put back a 2009 required minimum distribution if you are eligible for RMD waiver

September 24, 2009

If you have already received a 2009 required minimum distribution, you might be able to roll it back into the plan and not be taxed on the distribution, according to IRS guidance issued today:

The Worker, Retiree, and Employer Recovery Act of 2008 waives required minimum distributions for 2009 from certain retirement plans.
Generally, a required minimum distribution is the smallest annual amount that must be withdrawn from an IRA or an employer’s plan beginning with the year the account owner reaches age 70½. The 2008 law waives required minimum distributions for 2009 for IRSs and defined contribution plans (such as 401(k)s) and allows certain amounts distributed as 2009 required minimum distributions to be rolled over into an IRA or another retirement plan.

Notice 2009-82 provides relief for people who have already received a 2009 required minimum distribution this year. Individuals generally have until the later of Nov. 30, 2009, or 60 days after the date the distribution was received, to roll over the distribution.

So if you already have RMD cash, and you don't really need it, you can stick it back into the plan and not pay income tax on it this year.

Tags: Required Minimum Distribution.