The IRS is giving financial institutions a break when it comes to notifying owners of IRAs about taking their RMDs after a new law increased the age from 70½ to 72.
The Secure Act was signed into law last month and includes a number of changes to IRAs and 401(k) plans with the goal of increasing access to tax-advantaged retirement accounts. Among them was a change in the age by which clients are required to start taking minimum distributions from their IRAs, and it allows individuals to continue to make IRA contributions indefinitely.
Prior to passage of the Secure Act, financial institutions were required to notify by Jan. 31 any IRA owners who turn 70½ in 2020 about the RMD that would need to be made for 2020. But since the Secure Act changed the age triggering the RMD requirement from 70½ to 72, these notices are no longer due under the amended law.
The IRS issued
To help individuals and businesses prepare for filing season, Grant Thornton has released a collection of year-end tax tips.
The IRS said it is providing the relief because of the short amount of time after the enactment of the Secure Act that financial institutions have had to change their systems for furnishing the RMD statement.