NUA and the year your turn 70 1/2
Good morning. Say, I have a question that I need clarification on.
401(k) has company stock. Looking into NUA but taking in the year when turns 70 1/2.
If you elect the NUA in the year you turn 70 1/2 can the NUA count towards your RMD from the plan?
Thank you for your help.
Permalink Submitted by Alan - IRA critic on Mon, 2019-04-22 17:05
All amounts distributed to a taxable account count toward the 401k RMD. That includes the full market value of the employer shares including the cost basis as well as the NUA. In some cases if the first year RMD is deferred to 4/1 of year 2 and the LSD is done in year two, the distribution of employer shares will cover the RMD amount for both years. Of course, it is critical to be sure that the LSD will be qualified for NUA, that there has not been any distributions in an intervening year since the last triggering event, being either age 59.5 or separation from service.