Guidance for Required Minimum Distribution Waivers

Individuals must generally begin taking distributions from their qualified retirement accounts and IRAs beginning in the year they turn age 70½.  Under a law passed in late 2008, the required minimum distribution (“RMD”) rules mandating distributions were suspended for 2009.  The change was in response to the financial crisis.  Under the change, taxpayers are not forced to take retirement plan distributions in 2009 if they did not want or need to do so.

The IRS has issued Notice 2009-82 advising that individuals who have received a 2009 required minimum distribution have until the later of November 30, 2009, or 60 days after the date the distribution was received to roll it over. Thus, the IRS is waiving the 60 day rollover requirement to give taxpayers who received distributions in 2009 prior to the waiver of RMDs for 2009 the opportunity to return the 2009 RMD to the IRA or plan.  The Notice also outlines the steps a retirement plan sponsor must take to allow participants to not receive an RMD during 2009.  The one rollover per year limitation was not altered by the Notice so taxpayers who have already completed a rollover under the 60 day rule will be ineligible.

A copy of the Notice is availble by clicking here.