If you are over fifty nine and a half, you can begin to take distributions from your IRA without penalty.  However, once you reach 70 1/2 years of age, you must  begin to take mandatory minimum distributions called Required Minimum Distributions (RMD). A required minimum distribution (RMD) is the smallest amount that must be withdrawn from an IRA beginning in that year that you turn 70 1/2. As many of you may know, in 2008, Congress waived the RMD rule for the year 2009. 

This change in the law was meant to provide some relief for IRA account owners who had lost substantial value in their IRA investments.  However, many taxpayers unintentionally took their RMD’s and were not aware of the suspension for 2009.

In such cases, you would normally, have only 60 days to roll the money over back into your retirement plan and if you waited more than 60 days you would not be permitted to return the funds to the plan. 

The good news is that the IRS just issued Notice 2009-82 which allows those who have already received a 2009 RMDs this year and missed the 60 day rollover mark to roll the money back their IRA accounts.

This new rule temporarily allows individuals until the later of Nov. 30, 2009, or 60 days after the date the distribution was received, to roll over the distribution.  It is important to note that the 1 rollover per 12 month period rule continues to apply.

Thanks to Doug McGray of Ion Advisors for this bit of important news.

David M. Frees III, Esquire
Unruh, Turner, Burke and Frees
Offices in Malvern, Phoenixville, and West Chester
Serving Chester County, Montgomery County, Deleware County,
Philadelphia, Berks, Buck, and Lancaster Counties

610-933-8069