IRS Grants Relief for Taxpayers Who Took 2009 RMD

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New deadline is November 30, 2009. Did any of you withdraw required minimum distribution in 2009 without realizing that the 2009 RMD had been waived by the Worker, Retiree, and Employer Recovery Act of 2008? If so, you can put the money back so that you don’t pay tax on an unnecessary withdrawal.

Notice 2009-82 provides relief for those who have already received a 2009 required minimum distribution. With this new ruling, individuals generally have until November 30, 2009, or 60 days after the date the distribution was received (whichever is later), to roll over the distribution.

Example: Karen took her 2009 required minimum distribution of $27,000 in January 2009. When Karen met with her tax professional in April to have her 2008 taxes prepared, she learned that the 2009 RMD was waived. Because 60 days had passed, she was unable to put the money back into her IRA. The IRS now allows Karen to return all or any part of the $27,000 by November 30, 2009, as a qualifying rollover.