IRS Issues Guidance on 2009 Required Minimum Distributions
October 05, 2009
Required minimum distributions are minimum amounts that a retirement plan account owner generally must withdraw on an annual basis, starting with the year that he or she reaches 70 ½ years of age or, if later, the year in which he or she retires. (Different rules apply to business owners and IRAs.) The Internal Revenue Service recently issued guidance in Notice 2009-82 regarding the waiver of required minimum distributions during 2009 from certain retirement plans pursuant to the Worker, Retiree, and Employer Recovery Act of 2008. Among the issues addressed:
- Those individuals who have already received a 2009 required minimum distribution will now have until the later of November 30, 2009, or 60 days after receipt of the distribution, to roll it over to an IRA or another retirement plan.
- For retirement plan sponsors, the notice provides sample plan amendments for either stopping or continuing 2009 required minimum distributions by default, with provisions for participants and beneficiaries to choose whether to receive such distributions. These amendments also contain options for offering direct rollovers of 2009 required minimum distributions. Amendments would generally need to be adopted by the last day of the first plan year beginning on or after January 1, 2011.
IRAs do not have to be amended to reflect the 2009 required minimum distribution waiver.
If you would like more information on the content of this alert, please contact Christine Burke Worthen, a shareholder and Chair of Eaton Peabody's Tax Practice Group, or Rodney A. Lake.
This alert is provided as general information, and is not a substitute for legal or other professional advice.
