If yes, you should be aware that there have been many changes resulting from recent legislation and regulatory action including the SECURE Act, the CARES Act, and IRS COVID-19 guidance. This page outlines some key points to help you understand how these changes might affect you and/or your account. As always, with any important investing or tax considerations, please consult your financial advisor and/or tax advisor.

Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”)
Required Minimum Distributions (“RMD”)
The Secure Act changed the RMD age to 72 if you turned 70.5 after Dec 31, 2019. If you turned 70.5 prior to Jan 1, 2020 then your RMD age is still 70.5.

Contribution Age Limits
The maximum age at which you are eligible to contribute to an IRA was repealed. Previously, the age limit was 70.5.

Distributions
  • IRA beneficiaries must withdraw all assets from an inherited IRA within 10 years of the death of the account owner if the account owner passed away after Dec 31, 2019. Exceptions exist for spouses, minor children, the disabled, and others.
  • Parents are allowed to withdraw up to $5,000, penalty free, within one year of the birth or adoption of a child for qualified expenses.
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)
RMD
  • RMDs for 2020 have been suspended. You do not need to take a 2020 RMD.
  • The RMD suspension for 2020 applies to all retirement accounts and beneficiaries.
  • If you have already taken your 2020 RMD, you may be able to roll the amount back into your IRA. Generally, you may repay the distribution to the distributing IRA, even if the repayment is made more than 60 days after the distribution, provided the repayment is made no later than August 31, 2020. The repayment will not count towards the one rollover per 12-month period limitation.
Early or Premature Distributions/Withdrawals
The 10% penalty has been waived for premature distributions up to $100,000 for COVID-19-related purposes. These purposes include:

  • You, your spouse or a dependent was diagnosed with COVID-19
  • You have been adversely financially impacted by COVID-19 as a result of:
    • Closing a business
    • Being quarantined
    • Being laid off
    • Being furloughed
    • Having work hours reduced
    • Being unable to work due to lack of child care
COVID-19-related distributions must be taken by Dec 31, 2020.

Distributions are taxable; however, you may have the option to pay your taxes due over a three-year period.
The distribution can be paid back over three years (regardless of future years’ contribution limits).

Please consult your tax advisor for further information.

IRS COVID-19 Guidance
Contribution Deadline
The contribution deadline was moved back from April 15 to July 15 to coincide with the due date for filing individual federal tax returns and the payment of federal tax.

Online Resources
Organization: FINRA (The Financial Industry Regulatory Authority)
Web Page Title: What Do Investors Need To Know About the SECURE Act?
Web Address: https://www.finra.org/investors/insights/what-do-investors-need-to-know-about-secure-act

Organization: FINRA (The Financial Industry Regulatory Authority)
Web Page Title: CARES Act 2020: Retirement Fund Access and Student Loan Relief
Web Address: https://www.finra.org/investors/insights/cares-act-2020-retirement-fund-access-and-student-loan-relief

Organization: IRS (The Internal Revenue Service)
Web Page Title: Topics in the News
Web Address: https://www.irs.gov/newsroom/whats-hot

Organization: IRS (The Internal Revenue Service)
Web Page Title: Filing and Payment Deadlines Questions and Answers
Web Address: https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers

Organization: IRS (The Internal Revenue Service)
Web Page Title: Coronavirus Tax Relief and Economic Impact Payments
Web Address: https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments

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