Tag Archives: RMDs

Valuing the Economic Impact of the Worker, Retiree, and Employer Recovery Act of 2008

Posted on December 24, 2008 by in Taxes

H.R. 7327, the Worker, Retiree, and Employer Recovery Act of 2008, was signed by President Bush on December 23. The proposed bill, which in part offers a waiver of the 50% penalty for failing to take a minimum required distribution, has now become law.

Note that I write minimum required distribution, when most write required minimum distribution, commonly abbreviated RMD.  Much of the tax information published by the IRS prior to 2008 referred to the distribution in the former state (MRD) which is how I learned it over the past decade.  Alas, it appears the IRS has changed its references to the more common RMD beginning with 2008 publications.

I first blogged about the House passage of this bill here.

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Changes to RMD Law Passes House

Posted on December 11, 2008 by in Taxes

Update 12/24/08: Want to know the economic impact of the RMD waiver?  Read this post on FPPad.com. 

Late on Wednesday December 10, the House of Representatives passed H.R. 7327, the Worker, Retiree and Employer Recovery Act of 2008.  See the main House.gov press release here.  This bill suspends the 50% excise tax assessed when a taxpayer fails to take minimum required distributions from a retirement account. (See Senate vote update below)

I first wrote about potential changes to the RMD laws in this FPPad post, Are You Ramping Up for Potential RMD Changes? It wasn’t clear if the changes to the RMD requirements were going to apply for the 2008 tax year, so depending on what Congress did, there may have been a potential opportunity to delay distributions if they had not yet been taken.

The bill that passed waives the 50% penalty for tax year 2009.  Therefore, as of today, there’s no reason why an RMD for 2008 should be delayed any longer.  The waiver of the penalty does not apply for tax year 2008.

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Are You Ramping Up for Potential RMD Changes?

Posted on November 19, 2008 by in Taxes

RMDBoy, if there’s one thing I hate about the arrival of the end of the year, it’s the last-minute tax-related agendas Congress mulls around. 

Remember last year when the Tax Increase Prevention Act of 2007 (H.R. 3996) passed to provide temporary relief from AMT?  And don’t forget the Economic Stimulus Act of 2008 passed just over a month later in 2008.  These bills placed huge strains on the already overloaded IRS and threw monkey wrenches in some advisers’ tax planning strategies.

Case in point: the Wall Street Journal has a good article titled Feds Rethink Rules on Retirement Savings that discusses proposed changes Congress (or the Treasury, who knows?) may make to minimum required distribution laws for qualified and individual retirement accounts.

Click here to read Feds Rethink Rules on Retirement Savings

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