Notice 2020-51: The How-To Guide on Waiving and Rolling Over 2020 RMDs

By Jenny Kiffmeyer, J.D – The Retirement Learning Center

The IRS released Notice 2020-51 on June 23, 2020, in an effort to answer outstanding questions surrounding the waiver of required minimum distribution (RMDs) from retirement plans for 2020 brought about by the Coronavirus Aid, Relief, and Economic Security (CARES) Coronavirus Aid, Relief, and Economic Security (CARES) Act. The notice provides more details on several issues, including the ability to roll over 2020 RMDs, the rollover deadline, the amount that qualifies for rollover treatment, the one-rollover-per-12-month rule, federal tax withholding, and plan amendments, among others. The following paragraphs summarize the guidance in Notice 2020-51.


Generally, the IRS requires retirement plan participants and IRA owners to take RMDs each year after attaining age 72 (age 70 ½ prior to 2020 and the SECURE Act[1]) by their required beginning date (RBD). However, if a retirement plan’s provisions permit, nonowner plan participants who continue to work past age 72 may delay RMDs until after they retire.

Section 2203 of the CARES Act waives required minimum distributions (RMDs) for IRAs, defined contribution, 403(a) qualified annuity, 403(b) or governmental 457(b) plans for 2020. Defined benefit plans are not covered by this wavier.  As an added bonus under the CARES Act, a distributed amount that otherwise would have been an RMD for 2020 is eligible for rollover.

Clarifications from Notice 2020-51

Though straightforward, the waiver of the 2020 RMD has widespread ramifications for plan and IRA operations, and has generated numerous questions in the industry. The IRS’s Notice 2020-51 provides the following clarifications for plan sponsors, record keepers, and distribution recipients related to the 2020 waiver of RMDs.

Plan Sponsors and Record-Keepers

Despite 2020 RMDs being eligible for rollover treatment by their recipients, plan administrators and their record keepers

  • Need not offer a direct rollover option (although a 60-day, indirect rollover would still remain available to the participant);
  • Need not provide an IRC Sec. 402(f) “distribution” notice to distribution recipients; and
  • May not withhold 20 percent of the distribution for federal tax purposes [instead, a 2020 RMD is subject to the 10-percent optional withholding rules under IRC §3405(b)].

Regarding plan amendments, plan sponsors have some decisions to make, and should look to their record keeping partners for guidance. Notice 2020-51 provides a sample amendment plan sponsors may use to implement the 2020 RMD waiver. Plan amendments under the CARES Act, including the waiver of 2020 RMDs, are not due until the last day of the 2022 plan year (or 2024 plan year for governmental plans), and the IRS may further extend these dates.

1 The Setting Every Community Up for Retirement Enhancement (SECURE) Act provisions, contained in the Further Consolidated Appropriations Act, 2020, delayed

ACTION STEP:  Plan sponsors have decisions to make with respect to how they will treat distributions during 2020 that otherwise would have been RMDs. Therefore, they must work closely with their plan service providers to ensure compliance with the temporary waiver.

Recipients of 2020 RMDs

Notice 2020-51 confirms that distributed amounts that otherwise would have been 2020 RMDs are eligible for rollover, including

  • First-year 2019 RMDs that were taken by April 1, 2020,
  • First-year 2020 RMDs due to be taken by an April 1, 2021; plus
  • Amounts that are part of a series of periodic payments (that include a 2020 RMD) made at least annually over life expectancy, or over a period of 10 or more years.[2]

Notice 2020-51 makes other reassurances to 2020 RMD recipients:

  • The deadline for rolling over 2020 RMDs is the later of August 31, 2020, or 60 days after the distribution;
  • A 2020 RMD that is rolled over by the August 31, 2020, deadline does not count toward the one-rollover-per-12-month rule applicable to IRA-to-IRA rollovers;
  • Nonspouse beneficiaries also are allowed to roll over 2020 RMDs if done so by August 31, 2020; and
  • A 2020 RMD from a plan or IRA may be rolled back into the same plan or IRA (provided the plan permits rollovers).

2 Not to be confused with substantially equal periodic payments exempt from the 10% early distribution penalty tax under IRC Sec. 72(t)


Notice 2020-51 contains a helpful Q&A section that sheds light on a variety of specific operational issues, such as the following.

  • For plan participants and IRA owners who are not subject to RMDs as of 2020, the 2020 RMD waiver does not affect the deadline by which they must begin their RMDs. Therefore, their required beginning date—generally, April first of the year following the year they attain age 72—does not change.
  • For retirement plans that allow beneficiaries of participants who died in 2019 to elect either life expectancy payments or payments over five years, the deadline for such beneficiaries to decide is delayed one year—until December 31, 2021.
  • The 2020 RMD waiver does not affect substantially equal periodic payments established to be exempt from the 10 percent early distribution penalty tax pursuant to IRC Sec. 72(t). Distribution recipients must take the 2020 disbursement if required under the schedule in order to avoid a retroactive application of the 10 percent penalty to all prior payments.
  • For defined contribution plans subject to the spousal consent rules surrounding distributions, the question a plan sponsor must answer is whether or not there will be a new annuity start date. If the plan does not provide for a new annuity starting date, spousal consent is not required under most circumstances. If the plan provides for a new annuity starting date, spousal consent may be required for the suspension 2020 RMDs.
  • Financial organizations must notify their IRA clients that no RMD is due for 2020. One method of notification is to provide IRA owners with a copy of the 2019 Form 5498, IRA Contribution Information, that was filed with the IRS, indicating that there is no RMD required for 2020 (the extended IRS filing deadline for the 2019 Form 5498 is August 31, 2020).


The 2020 waiver of RMDs affects IRA owners, plan participants, beneficiaries, plan sponsors and those that serve them (e.g., record keepers, administrators and financial advisors). It is essential to review and update current documents, policies and procedures to ensure compliance with the new rule.


Consider TRA's 3(16) Fiduciary Services & Plan Administration

To alleviate the day-to-day administrative burdens of yours or your clients retirement plans.