CARES Act

The CARES Act includes several provisions that make temporary changes to the federal laws governing IRAs and workplace retirement plans (e.g., 401(k) plans) including:

• Suspending all required minimum distributions (RMDs) from IRAs (including inherited IRAs) and workplace retirement plans for tax year 2020.
• Penalty-free withdrawals up to $100,000 per person for “qualified individuals” (see FAQ below) from IRAs and workplace retirement savings plans for distributions taken on or after January 1, 2020 and before December 31, 2020. These withdrawals are eligible for flexible taxation and repayment options not generally available for retirement savings distributions.
  

- Cares Act distributions may be taxed pro-rata over three years if desired, and/or repaid back into plans within three years from the distribution date.

• Increasing loan limits and suspension of loan repayment requirements for qualified individuals who have (or who take) a loan from their workplace retirement savings plans.
  

- The higher loan limit is only available if the employer plan allows, and is limited to new loans taken within 180 days from CARES Act enactment.
- Plans must allow participants who are qualified individuals to suspend 2020 loan repayments, if the participant desires.

A qualified individual includes a person, their spouse or a member of their household who has been impacted by COVID-19 including:

• Being diagnosed with COVID-19 by a test approved by the Center for Disease Control and Prevention (including a test authorized by the Federal Food, Drug and Cosmetic Act).
• Experiencing adverse financial consequences as a result of:
  
  
  • being furloughed, laid off or having to reduce hours
  • being unable to work due to lack of childcare
  • having to close or reduce hours of a business owned by the individual
  • having to reduce pay or self-employment income
  • having a job offer rescinded or delayed

All RMDs have been suspended for 2020, including inherited IRA RMDs, however you may still take distributions from your retirement accounts.

Log in to your TD Ameritrade account and go to My Account > Deposits & Transfers > Distribution. From there you can request a one-time or multiple distributions using your preferred frequency and method (ACH, check, wire, or internal transfer).

If you initially set up the distribution online yourself, you can cancel it by going to My Account > Deposits & Transfers > Activity.

If you originally set up a recurring distribution by sending us an IRA Distribution Form, you can request a cancellation by sending us an email via the Message Center or calling 800-669-3900.

You may repay the distribution amount taken between January 1, 2020 and June 23, 2020 to your IRA, any time before August 31, 2020. The repayment of your RMD amount will not be treated as a 60-day rollover for the purposes of the one rollover per 12-month period limitation. Any amount above the RMD amount or taken June 24, 2020 or later will be treated as a 60-day rollover, provided you meet the requirements.

Non-spouse beneficiaries may also return the RMD amount by August 31, 2020. Only the RMD amount may be returned to the original account they were distributed from. Any amount above the RMD may not be returned to the account.

Note: distributions not rolled could be treated as Coronavirus Distributions if you are a Qualified individual, allowing you to pay the taxes on the distributions pro-rata over 3 years if desired. If you are a spouse beneficiary you could also repay the amount considered to be a Coronavirus Distribution within 3 years.

Please consult with your tax advisor before putting money into or taking funds out of a retirement account.

Log in to your account and navigate to My Account > Deposits and Transfers > Distributions > Choose a method > Premature (under 59 1/2 years old).

Please consult a tax advisor before putting money into or taking money out of a retirement account.

Yes. The CARES Act waives 2020 mandatory life expectancy payment distributions for IRA beneficiaries and retirement plan beneficiaries. As with IRA owners and plan participants, beneficiaries may still choose to take discretionary withdrawals

Yes. The CARES Act stipulates that beneficiaries taking withdrawals under the 5-Year Rule may disregard 2020 in determining the deadline by which all inherited funds must be distributed from the decedent’s inherited IRA or retirement plan. (Note: The 5-Year Rule is a distribution rule that requires a beneficiary to take complete distribution of all inherited funds by no later than December 31 of the fifth year following the year of the IRA owner’s or plan participant’s year of death.)

Generally, when an IRA owner or plan participant who is in distribution status passes away, their beneficiaries are responsible for taking distribution—before year end—of any outstanding current-year RMD amounts that were not taken prior to death. Due to the blanket waiver on all 2020 RMDs, beneficiaries of IRA owners or plan participants who pass away during 2020 are not required to take distribution of any undistributed, year-of-death RMDs. Beneficiaries, however, may still choose to take discretionary withdrawals.