Under the rules of the SECURE Act there are two classifications of designated beneficiaries for an IRA. The CARES Act waives required minimum distributions (RMDs) during 2020 for IRAs and retirement plans, including mandatory distributions for beneficiaries of inherited accounts. The CARES Act waives RMDs for 2020. The CARES Act waived 2020 required minimum distributions out of retirement accounts. The CARES Act allows for an additional year as there would be no mandatory withdrawal for 2020. Probably so that tax-free inherited Roth money that would just be sitting there and growing gets forced back into circulation sooner, thus generating more taxable expenditures. New Inherited IRA Rules for Beneficiaries. Why does the SECURE Act speed up RMD payments? The SECURE Act requires non-eligible designated beneficiaries to empty the inherited Roth IRA account by the end of the 10th year after the year of death. While the CARES Act does not specifically address inherited IRAs, beneficiaries of inherited IRAs from account owners who died before January 1, 2020 should not have to take an RMD in 2020. Thus, Jose and Luis are not required to take any distributions this year. The 10-year period for non-eligible designated beneficiaries of inherited IRAs from account owners who died after December 31, 2019 does not begin until 2021. Also, if you turned 70½ in 2019 and would have been required to take your first RMD … For 2020, if it weren’t for the CARES Act eliminating RMDs for 2020, your RMD would have been equal to the account balance at the end of 2019, divided by 52.3. A RMD is the amount of money that is required to be withdrawn by the account owner of a traditional IRA when such account owner reaches a certain age and by the beneficiary of an inherited IRA. Note that this waiver of RMDs for 2020 is not limited to those who are affected by COVID-19. Inherited IRA Subject to 5-Year Distribution: Generally, these would be IRA assets inherited through a will or trust that did not qualify as a designated beneficiary and thus a lifetime distribution. Some who took those RMDs were able to roll them back into their IRA or … Individuals who inherited an IRA prior to 2020 must take RMDs based on their own life expectancies. The CARES Act also allows Jose to return the distribution to his inherited IRA. In 2021, the RMD will be the 12/31/2020 balance, divided by 51.3. The CARES Act extends the due date for taking 2020 RMDs to January 1, 2021. (But because of the CARES Act, the RMD for 2020 would be zero.)