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Below are some of the changes to IRA requirements for 2009, including IRA distributions. Additional updates may occur throughout the year. New laws and IRS guidance can change IRA rules, sometimes requiring updates to plan documents and forms. To get a copy of the latest disclosures, call member service at 360.891.4000 or visit your nearest branch.
IRA distributions waived for 2009
A new law waives required minimum distributions (RMDs) from defined contribution plans and Individual Retirement Accounts (IRAs) for the entire 2009 calendar year. The Worker, Retiree and Employer Recovery Act of 2008 was passed to help retirees recover losses incurred from volatility in the stock market over recent months.
Under this law, if you are an IRA holder:
- Who is age 70½ or older in 2009 or are a beneficiary of a deceased IRA holder’s account, you are NOT required to take an RMD for the 2009 tax year.
- Who turned age 70½ in 2008 and chose to delay your first RMD, you must still take your 2008 RMD by April 1, 2009.
- You may still elect to take a distribution in 2009; if you choose.
Affected accounts include:
- Individual retirement accounts (IRAs)
- Simplified employee pension (SEP) IRAs
- Savings incentive match plan for employees (SIMPLE) IRAs
- Inherited IRAs
Other key changes include:
- Waiving 2009 RMDs and beneficiary life expectancy payments
- Extending the time for taking qualified charitable distributions from Traditional and Roth IRAs
- Allowing Rollovers of certain airline bankruptcy settlement payments to Roth IRAs
- Requiring employer plans to provide a direct rollover option for non spouse beneficiaries
- Eliminating certain restrictions for Roth 401(k)/403(b) rollovers to Roth IRAs
- Eliminating gap period income from excess deferral calculations, and clarifying various provisions to the eligible automatic contribution arrangement rules
If you have questions on any of these changes, please consult your tax advisor. If you are receiving automatic distributions from your IRA and would like to discontinue these payments, please contact a Columbia representative at 360.891.4000 or stop by your nearest branch.
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