Newly Posted Article - "New Tax Law Suspends Minimum Required Distributions for 2009"
[February 2, 2009]
Kristin Wildman Shirahama

Signed into law December 23, 2008, "The Worker, Retiree, and Employer Recovery Act of 2008" (WRERA) suspends minimum required distributions (MRD) from defined contributions plans like IRA's, 401(k)'s, 403(b) and 457 plans for 2009. The suspension applies to both plan owners and their designated beneficiaries.

The new law does NOT change the beginning date for distributions during a retiree’s lifetime or after death. If one’s first MRD is to be taken by April 1, 2009, it must be taken and cannot be postponed under the new law. If one’s first MRD is to be taken by April 1, 2010, one must take his first MRD by April 1, 2010 and one’s second MRD by the end of 2010.

If a plan participant dies in 2008, MRD's begin for the beneficiary in 2010 due to the 2009 suspension.

There may be a tax planning opportunity because one may roll over his 2009 distributions to a Roth IRA, if the plan participant qualifies under the $100,000 income eligibility limit for Roth IRA's.

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