2009 RMDs
Mar 10, 2009

CONGRESS WAIVES THE REQUIREMENT FOR MANDATORY DISTRIBUTIONS FOR 2009

The Worker, Retiree, and Employer Recovery Act of 2008 suspends RMDs for 2009. That is, no minimum distribution will be required from IRAs and employer-sponsored defined contribution retirement plans (e.g., qualified stock bonus plans, qualified profit-sharing plans, 401(k) plans, 457(b) plans, and 403(b) plans) for the 2009 calendar year. This applies to both RMDs during a plan participant's or IRA owner's lifetime as well as after-death RMDs to beneficiaries. (The Act does not suspend 2009 RMDs from defined benefit plans.)

An individual who reached age 70 1/2 prior to 2009 would normally be required to take his or her 2009 RMD no later than December 31, 2009. As a result of this legislation, that RMD will not have to be made. An individual who reaches age 70 1/2 in 2009 would normally be required to take his or her first RMD on or before April 1, 2010. As a result of this legislation, no distribution is required for 2009, and thus there is no requirement that a distribution be made by April 1, 2010. However, in both cases, the individual will still be responsible for taking an RMD for the 2010 calendar year on or by December 31, 2010. (Note: Employees who continue to work beyond age 70 1/2 are not required to take RMDs until they separate from service, unless they are 5 percent owners of the employer.)

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