February 11, 2009

Congress Suspends Minimum Required Distributions For 2009

Before it adjourned in December 2008, the 110th Congress enacted the Worker, Retiree, and Employer Recovery Act of 2008 (the Act), providing a one-year moratorium on minimum required distributions from IRAs and defined contribution plans.  Owners and beneficiaries of IRAs and defined contribution plans who are 70½ or older are required to take minimum required distributions (MRDs) from their plans each year.  Failure to take the MRD generally results in a penalty of 50 percent of the MRD.  Under the Act, individuals can skip taking their 2009 MRD and no penalties will apply.

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