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1 1 (March 24, 2020)

handle is hein.crs/govcawu0001 and id is 1 raw text is: Researh Sevice Required Minimum Distributions from Retirement Accounts Under the Economic Stimulus Proposals Related to the Coronavirus (COVID-19) March 24, 2020 On March 22, 2020, the Senate released an updated version of the Coronavirus Aid, Relict, and Economic Security (CARES) Act containing a provision for suspending the penalty for failure to make the required minimum distribution (RMD) from retirement accounts for 2020. A similar provision was included in a proposal in the House released on March 23, the Take Responsibility for Workers and Families Act. What Are Required Minimum Distributions? Under current law, required minimum distributions must be withdrawn from individual retirement plans to avoid a 50% penalty on the required minimum distribution (RMD) amount. The required distribution amount is the minimum amount that must be withdrawn each year after the account holder reaches a certain age. These requirements apply to traditional IRAs and plans set up by employers, such as 401(k) plans. (They do not apply to individual Roth IRAs, although they do apply to Roth 401 (k) plans.) Account holders are not required to take distributions from 401 (K) plans if they are still working. Distributions must begin in the year when an individual turns 72 (7012 for individuals attaining that age before January 1, 2020). The increase in the age at which minimum distributions must be made to avoid the penalty was changed by recent legislation, the Setting Every Community Up for Retirement Enhancement (SECURE) Act, part of the Further Consolidated Appropriations Act, 2020 (P.L. 116-94). The penalty is imposed to prevent individuals from keeping funds in their retirement accounts, without paying taxes, indefinitely. For the first year that distribution requirements apply, distributions can be delayed until April 1 of the following year. The amount of the distribution is based on life expectancy and the account balance at the end of the previous year. For singles and spouses whose ages are less than 10 years apart, the uniform lifetime table is used to determine the RMD. The share of retirement assets that must will be distributed increases with Congressional Research Service https://crsreports.congress.gov IN11272 CRS NStGHT Prepaimed for Mernhe-s amd Committees oi C- --q.. . . . . . . . . . ..----------------------------------------------------------------------------------------------------------------------------------------------------------------------

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