October 1, 2009
On September 24, 2009, the Internal Revenue Service (IRS) Issued Notice 2009-82, which provides relief for individuals who received a 2009 required minimum distribution (RMD) earlier this year. Most individuals now have until the later of November 30, 2009, or 60 days after the date the distribution was received to deposit the proceeds into an IRA or eligible retirement account. Note: Distributions from Inherited IRAs may not be eligible for rollover.
The Worker, Retiree, and Employer Recovery Act of 2008—signed by President Bush on December 23, 2008—provides tax relief to investors age 70½ and older by suspending the RMD obligation from most retirement accounts for 2009.
The legislation, which also applies to beneficiaries of any age, enables those investors to avoid liquidating or transferring assets from certain accounts that may have decreased in value over the past several quarters. Accounts affected by this new law include Traditional and Rollover IRAs, SEP-IRAs, SIMPLE IRAs, 403(b)s, and other defined contribution plans including Profit Sharing, Money Purchase Pension, and 401(k)s. The suspension also applies to Inherited IRAs and inherited retirement plan accounts that would otherwise be subject to RMDs.
| How Does This Affect Me? | |||
| If you were born... | Then... | Therefore... | However, you will benefit from the RMD moratorium for tax year 2009* |
| before June 30, 1937 |
you attained age 70½ prior to 2008 | you were required to take your 2008 RMD by December 31, 2008 | The 2009 RMD is not required |
| between July 1, 1937, and June 30, 1938 |
you attained age 70½ in 2008 | you will be required to take your 2008 RMD by April 1, 2009 | The 2009 RMD is not required |
| between July 1, 1938, and June 30, 1939 |
you will attain age 70½ in 2009 | you were not required to take a 2008 RMD you would have been required to take your 2009 RMD by April 1, 2010 |
The 2009 RMD is not required |
*The moratorium allows account holders to elect to cancel distributions scheduled for 2009 that would have been required to meet 2009 RMD requirements. While the 2009 RMD is not required, the 2010 RMD must be distributed in 2010. The chart above is not applicable for beneficiaries. A beneficiary of any age previously required to take a distribution for 2009 may be eligible to elect not to do so.
Feedback