Important information regarding
the CARES Act 2020 about Required Minimum Distributions

Please click here to review new Rollover Rules for 2020 RMDs

Here are some of the highlights of the CARES Act in terms of how it relates to access to your retirement savings:
 

  • All Required Minimum Distributions (RMDs) are suspended for 2020 including those for inherited IRAs and Traditional IRAs of those over age 70½. 
     
  • 2020 RMD’s that have already been taken will be taxed as regular income. A provision in the act will allow the return of a distribution if the funds are returned within 60 days to an IRA or deposit the funds to another qualified retirement account without owing taxes. The funds can also be converted into a Roth IRA.
     
  • The tax return filing deadline for 2019 was extended to July 15, this also extends the deadline for making a 2019 contribution to an IRA to July 15, 2020.
     
  • The 10% penalty on withdrawals from IRA and 401k’s for individuals under the age of 59 1/2 is waived. The waiver applies to distributions taken between January 1, 2020 and December 31, 2020. Up to $100,000 of distributions can avoid the penalty this is an aggregate figure. Income taxes on a coronavirus-related distribution can be paid over a three-year period. The individual also has up to three years to recontribute the amount to a plan or IRA.
     
    • To qualify for the IRA distribution exception, the purpose must be coronavirus-related.
      • The individual, the individual’s spouse or a dependent must have been diagnosed with COVID-19, or the individual must experience adverse financial consequences as a result of being quarantined, furloughed, laid off or having work hours reduced due to COVID-19.
      • Individuals who were unable to work due to lack of child care as a result of COVID-19
      • An individual whose business was closed or had reduced operating hours as a result of COVID-19.

To delay your Northwest Federal IRA RMD for 2020, the request will need to be sent in writing by email, mail or fax. Please send a letter requesting the RMD to be suspended and include the following information:

  • IRA owner's name
  • Account Number
  • Month the RMD was set to start
  • Letter must be signed and dated


Questions? Please call IRA/Estate Department at 703-709-8900 x4489


If sending your RMD delay request letter by mail, mail to:

Northwest Federal Credit Union
Attn: IRA Department
200 Spring Street
Herndon, VA 20170