News Now

Consumer
IRS extends deadline to roll over 2009 RMDs
MADISON, Wis. (9/28/09)--Individual Retirement Account (IRA) owners who have already received a 2009 required minimum distribution (RMD) this year are getting a break from the Internal Revenue Service (IRS). IRS announced Wednesday that individuals have until the later of Nov. 30, or 60 days after the date the distribution was received, to roll over a distribution. An RMD is the smallest annual amount that must be withdrawn from an IRA or qualified plan once the account owner reaches age 70 1/2. Late last year, The Worker, Retiree, and Employer Recovery Act of 2008 waived RMDs from IRAs and qualified retirement plans for 2009. Because of this legislation, IRA owners and beneficiaries who would have been required to receive an RMD for 2009 are not required to receive a distribution. Most financial institutions notified their IRA owners about the waiver and gave them the option of whether to waive the 2009 RMD or receive it as a distribution. But some IRA owners didn’t have time to notify their financial institution, didn’t realize that they could waive the RMD, or if they received the distribution, didn't know that they had 60 days to roll over the funds. In many cases, the IRA owner had no choice but to keep the RMD and pay taxes on it. IRS Notice 2009-82 grants relief for these IRA owners by extending the 60-day deadline for rolling over a distribution of the 2009 RMD from an IRA until Nov. 30. However, the extension does not affect the once-a-year rollover rule, so at most an IRA owner can roll over one distribution under this extension. “The IRS recognized the short amount of time financial institutions had last year to notify their IRA owners about the 2009 RMD waiver and the fact that many IRA owners received 2009 RMDs they may not have wanted and were not required to take,” said Dennis Zuehlke, compliance manager for Middleton, Wis.-based Ascensus IRA Services, which serves 80% of credit unions offering IRA programs. By permitting IRA owners extra time to roll over a 2009 RMD distribution, the IRS is helping them avoid taxes on distributions they were not required to take, Zuehlke said. Notice 2009-82 also provides guidance for qualified retirement plan sponsors and contains sample plan amendments that sponsors may use to stop or continue 2009 RMDs, he said.
Other Resources

RSS





print
News Now LiveWire
Registration lottery for #CreditUnion #CherryBlossom Ten Mile Run opens Monday, Dec. 1 http://t.co/AGkKPof5Fy. Race is April 12
1 Day ago
The turkey hasn't even been served and #creditunions are already making plans for #GivingTuesday
1 Day ago
.@bankofamerica's $16.65 billion 'toxic mortgage' settlement finalized http://t.co/BIq1QyImXG
1 Day ago
RT @CUNA: #NussleReport: ICYMI: Revised RBC proposal in January w/a 90-day comment period #Fix RBC http://t.co/T4JcvWBDse
1 Day ago
.@TheNCUA release on Nov. prohibition orders out already. Here: http://t.co/YkA1QIYbYa
1 Day ago
150x172_Sign up for election newsUnite for Good Share your Stories100 Million CU Memberships