can someone in distribution of an IRA take advantage of the new rule to deposit a tax refund to the account?

Question

If one is in required distribution, can they still direct deposit their tax refund to that account? The new option seems to make sense for other IRA's like the Roth but I didn't think it was possible to make a contribution to a traditional if you are in distribution. I know someone who is planning on taking advantage of the new option and I wondered if it won't cause a problem later.
If the bank allows it (how could they stop it if the account number is valid?) is there a correction that can be made later?
Any help would be appreciated

Answer 1

A taxpayer who is required to take a minimum distribution from an IRA has reached the age of 70.5. After age 70.5, no additional contributions to a traditional IRA are allowed.

The IRS is allowing taxpayers who receive a refund on their tax return to deposit refund money into their IRAs. However, this does not change the rule that taxpayers over the age of 70.5 may not contribute to a traditional IRA.

A taxpayer over the age of 70.5 may contribute to a Roth IRA, and if the taxpayer had a refund, it may be deposited (in full or part) to the Roth IRA.

If a taxpayer who is not allowed to contribute to a traditional IRA makes a contribution anyway, the contribution will be treated as an excess contribution subject to a 6% annual excise tax for each year that excess contribution remains in the account.