This is good news for anyone who prefers to delay the recognition of income resulting from an IRA
KEY TAKEAWAYS • Old RMD beginning age: 70½ • New RMD beginning age: 72 • Effective date: 1/1/2020
distribution. Additionally, the SECURE Act simplifies the RMD calculation by basing beginning distributions on a birthdate, rather than a half year.
Contributions: The SECURE Act eliminates the age restriction on funding a traditional IRA. Starting January 1, 2020, all those with earned income may continue to fund their IRA, without regard to age. Generally, earned income includes taxable employee compensation and net earnings from self-employment, as well as certain disability payments.
KEY TAKEAWAYS • No longer an age cap for contributions • Must have earned income
Keep in mind however that the new rules are not available for any 2019 carryback. Those age 70 1 / 2 or older during 2019 cannot make a Traditional IRA contribution for the 2019 tax year.
Part two of three on the SECURE Act of 2019 will discuss accelerated withdrawals and how various types of IRA beneficiaries (including spousal, non-spousal, children, the disabled, chronically ill, and non- person beneficiaries) are affected. Part three of three in this series will discuss qualified charitable distributions (QCDs). Given the SECURE Act’s many changes, we encourage you to seek the guidance of your tax or legal professional for any questions or concerns as to how you may be affected. For additional questions to our Wealth Management team, feel free to reach out to any of our Trust or Wealth Management Officers at 319-338-1522.
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3rd Quarter 2020
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