IRS Issues Guidance Amid Secure Act RMD Confusion
January 29, 2020 by Melanie Waddell
The Internal Revenue Service released guidance Monday for financial institutions on how to report required minimum distributions for 2020 under the Setting Every Community Up for Retirement Enhancement Act of 2019, or the Secure Act.
The IRS Notice 2020-6 “is more of an institutional fix for the financial companies that sent out what are now incorrect RMD notices to IRA owners who will turn age 70½ in 2020,” IRA specialist Ed Slott told ThinkAdvisor on Monday.
Under the Secure Act, “that age changed to 72, so these people do NOT have an RMD for 2020. Some clients of advisors are rightfully confused as to whether they are subject to RMDs or not in 2020.”
The notice provides relief to financial institutions “who due to the short amount of time they had after the Secure Act was enacted, sent out notices with incorrect info, confusing lots of people,” Slott explained.