CPA, Elizabeth Owen, gives an update on the SECURE Act and CARES Act related to retirement plans. Watch the video here.
The SECURE Act makes a variety of tax law changes related to retirement plans. Notably, it repeals the maximum age of 70 ½ for making traditional IRA contributions, and it increases the age for beginning required minimum distributions, or RMDs, from age 70 ½ to age 72, for taxpayers who didn’t turn age 70 ½ before January 1, 2020.
In addition to the SECURE Act, the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, provides some temporary relief to retirement plan owners in response to the COVID-19 crisis. For owners who don’t need funds from their accounts this year, the act waives retirement plan required minimum distributions for 2020. For owners who need funds from their accounts to help them financially, the act waives the 10% early withdrawal penalty on COVID-19-related distributions up to $100,000.
Speak with your ATA tax advisor to learn how these acts may affect your retirement plan contributions or distributions. Click here to speak with one of our accounting professionals about your tax planning needs.