Attention IRA Holders
Your IRA documents have been amended to incorporate changes resulting from the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act of 2022. We have provided a summary of the changes below.
Traditional IRA:
- New penalty tax exceptions were added for qualified disaster recovery distributions and terminal illness, effective immediately. Beginning in 2024, new penalty tax exceptions are available for unforeseen emergency expenses and victims of domestic abuse. The early distribution penalty exceptions were updated to include the new options and language was also added to address the ability to repay these types of distributions.
- Qualified birth or adoption distributions may be repaid to an IRA within three years of the distribution. Language was added to clarify the repayment deadline for these distributions.
- If you were born on or after January 1, 1951, you have a new required beginning date for required minimum distribution (RMD) purposes. Language was added to modify the required beginning date for applicable individuals.
- The excess accumulation penalty for missed RMDs was reduced from 50 percent to 25 percent (and possibly 10 percent), if corrected timely. Language was added to explain the penalty reduction.
- Qualified charitable distributions (QCDs) may now include a $50,000 one-time payment to certain split-interest entities. Beginning in 2024, the QCD limits may be subject to cost-of-living adjustments. The QCD section was updated to reflect these new provisions.
- Catch-up contributions are now subject to cost-of-living adjustments beginning in 2024. Language was added to address the possible adjustments.
Inherited IRA:
- The excess accumulation penalty for missed RMDs was reduced from 50 percent to 25 percent (and possibly 10 percent), if corrected timely. Language was added to explain the penalty reduction.
- If the original IRA owner was born on or after January 1, 1951, spouse beneficiaries do not have to begin taking life expectancy payments until the year the original IRA owner would have been age 73. Language was added to modify the payment start date for spouse beneficiaries.
- Qualified charitable distributions (QCDs) may now include a $50,000 one-time payment to certain split-interest entities. Beginning in 2024, the QCD limits may be subject to cost-of-living adjustments. The QCD section was updated to reflect these new provisions.
Roth IRA:
- New penalty tax exceptions were added for qualified disaster recovery distributions and terminal illness, effective immediately. Beginning in 2024, new penalty tax exceptions are available for unforeseen emergency expenses and victims of domestic abuse. The early distribution penalty exceptions were updated to include the new options and language was also added to address the ability to repay these types of distributions.
- Qualified birth or adoption distributions may be repaid to an IRA within three years of the distribution. Language was added to clarify the repayment deadline for these distributions.
- The excess accumulation penalty for missed RMDs was reduced from 50 percent to 25 percent (and possibly 10 percent), if corrected timely. Language was added to explain the penalty reduction.
- Qualified charitable distributions (QCDs) may now include a $50,000 one-time payment to certain split-interest entities. Beginning in 2024, the QCD limits may be subject to cost-of-living adjustments. The QCD section was updated to reflect these new provisions.
- Catch-up contributions are now subject to cost-of-living adjustments beginning in 2024. Language was added to address the possible adjustments.
- Beginning in 2024, funds that have been in a designated beneficiary’s qualified tuition program that has been maintained for 15 or more years may be moved directly to the designated beneficiary’s Roth IRA if the funds have been in the program for at least five years and specific requirements are met. Language has been added describing these new transactions.
Simple IRA:
- Beginning in 2024, increased deferral limits are allowed for employees of employers with no more than 25 employees who received at least $5,000 in compensation the preceding year. Language has been added to address these higher limits.
- New penalty tax exceptions were added for qualified disaster recovery distributions and terminal illness, effective immediately. Beginning in 2024, new penalty tax exceptions are available for unforeseen emergency expenses and victims of domestic abuse. The early distribution penalty exceptions were updated to include the new options and language was also added to address the ability to repay these types of distributions.
- Qualified birth or adoption distributions may be repaid to an IRA within three years of the distribution. Language was added to clarify the repayment deadline for these distributions.
- If you were born on or after January 1, 1951, you have a new required beginning date for required minimum distribution (RMD) purposes. Language was added to modify the required beginning date for applicable individuals.
- The excess accumulation penalty for missed RMDs was reduced from 50 percent to 25 percent (and possibly 10 percent), if corrected timely. Language was added to explain the penalty reduction.
- Qualified charitable distributions (QCDs) may now include a $50,000 one-time payment to certain split interest entities. Beginning in 2024, the QCD limits may be subject to cost-of-living adjustments. The QCD section was updated to reflect these new provisions.
- Catch-up contributions are now subject to cost-of-living adjustments beginning in 2024. Language was added to address the possible adjustments.
For more information, please visit the IRS website. To obtain a printed copy of the amendment, please call our Contact Center at 800-779-5555.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Blackhawk Community Credit Union and Blackhawk Wealth Management Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Blackhawk Wealth Management Services, and may also be employees of Blackhawk Community Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Blackhawk Community Credit Union or Blackhawk Wealth Management Services. Securities and insurance offered through LPL or its affiliates are:
