1 Effective 1/1/2020, in accordance with new legislation, the required beginning date for RMDs is age 72. You may defer your first RMD until April 1st in the year after you turn age 72, but then you’d be required to take two distributions in that year. Failure to take all or part of an RMD results in a 50% additional tax applicable to the amount of the RMD not withdrawn. In addition, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, all 2020 RMDs have been waived. There are no coronavirus eligibility requirements associated with this change. 2020 distributions that would have been RMD payments prior to the law change may be restored to a plan or IRA subject to the 60-day rollover rule and the one-rollover-per-year limitation.
2 In order for a withdrawal to be considered a “qualified distribution,” at least five years must have elapsed from the first day of the year in which you made your initial contribution or Roth conversion, if earlier, and you must be age 59 ½ or older, disabled or deceased. If you take a non-qualified distribution, any investment returns are subject to regular income tax plus a 10% additional federal tax if you are under the age of 59 ½, unless an exception applies.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.