In the December 12, 2008 Boston Globe business section there was a report on a bill in Congress amending the Pension Plan Act of 2006, which included an amendment to change the minimum required distribution (MRD) laws for individuals over the age of 70 1/2. Was this bill passed and the MRD altered?
On December 23, 2008 President Bush signed into law the "Worker, Retiree, and Employer Recovery Act of 2008". This bill waives the minimum required distribution from an Individual Retirement Account (IRA) or defined contribution plan. This waiver is temporary and is only effective for calendar year 2009.
The tax laws require individuals who have reached age 70½ to take an annual minimum amount from their 401(k) plan or IRA. Failure to comply with this law subjects the individual to a 50 percent excise tax penalty on the amount that should have been withdrawn. As an early Christmas present to seniors, the President and Congress have waived these distribution requirements and the excise tax for 2009.
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