Congress recently passed several pieces of legislation with changes to Individual Retirement Accounts (IRAs). We want to make you aware of the key changes as they may affect you.
Important changes for 2020:
- There is a temporary waiver of the required minimum distribution (RMD) from Traditional, SEP, SIMPLE, or BENI IRAs in 2020. If you would like to waive your RMD for 2020, please let us know as soon as possible. There is a grace period allowing you to roll a distribution back into the IRA within 60 days of distribution.
- IRA owners younger than 59 ½ can now take distributions up to $100,000 from an IRA with no 10% early withdrawal penalty tax from the IRS. Income taxes would still be assessed on the distribution. This provision is in effect in 2020 for purposes related to the coronavirus pandemic. These distributions can be repaid to the IRA within three years.
- More medical expenses now qualify for Health Savings Account distributions, including non-prescription medicines and menstrual care-related products.
- The IRS tax filing deadline has been extended to July 15, 2020.
- The IRA and HSA contribution deadline has been extended to July 15, 2020 for contributions attributable to 2019 taxes.
- The age limit for Traditional IRA contributions has been removed.
As your community bank, we want to ensure you’re informed of the provisions in the law that apply to you and your IRA. If you have questions about any of these topics or anything else related to your IRA, please contact us.