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IRS Waives RMD for 2009 and Allows Rollover of 2009 RMDs Already Distributed

A required minimum distribution (RMD) is the smallest annual amount that must be withdrawn from an IRA or an employer’s retirement plan each year after reaching a required minimum age. Generally, this occurs when the account owner reaches age 70½. (There are exceptions, however.)

The Worker, Retiree, and Employer Recovery Act (WRERA) of 2008 waives the RMD requirement for 2009. It also allows certain amounts distributed as 2009 RMDs to be rolled over into an IRA or other retirement plan. Notice 2009-82, which was issued by the Internal Revenue Service on September 24, 2009 explains additional options for repayment.
 
If you haven’t yet  received a 2009 RMD, you can hold off on taking a distribution until 2010!

Already received a RMD for 2009? 

• You may keep it as normal, and pay tax on it as usual.
•  You may rollover the distribution into your current plan (assuming your plan allows it) or a new plan by the later of:

1. November 30, 2009, or,
2. Sixty days after the date of the distribution was received.

This will remove the distribution from your 2009 taxable income and you will not have to pay tax on the distribution. 

One important caveat:  the taxpayer is only allowed one rollover in a one-year period and only for one distribution.  Consequently, if you already rolled over an amount to an IRA within a one-year look-back period, you are prohibited from rolling over again.  Also, only one distribution may be selected during the one-year look-back period.  Thus, IRA owners who received 2009 RMDs in more than one distribution (i.e. monthly) may only rollover one of these distributions.  
 

For further information, please contact Amber Larsen at 312.980.2964 or your Blackman Kallick representative.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.