Secure Act Proposed regs
I keep reading about the new IRA regulations issued in February 2022, but also see they are “proposed” regulations. Are they actual regs or are they still under discussion?
Thanks
I keep reading about the new IRA regulations issued in February 2022, but also see they are “proposed” regulations. Are they actual regs or are they still under discussion?
Thanks
Permalink Submitted by Alan - IRA critic on Fri, 2022-04-22 13:53
They are currently just proposed, and there are a few overly complex provisions which will trigger debate. The proposal is expected to be final late this year, maybe so late that some 2022 RMDs could be waived as a result.
Permalink Submitted by Bryan Trible on Fri, 2022-04-22 19:47
Thanks so much for the detail. As an advisor, I am on the fence whether to suggest clients with inherited IRAs that would be impacted move forward with distributons or wait until the regs are finalized. Any thought?
Permalink Submitted by Alan - IRA critic on Fri, 2022-04-22 21:33
Per Proposal, no annual RMDs will be required for any Roth beneficiary or for any non Roth beneficiary of a pre RBD decedent.
Both pre and post RBD non Roth beneficiaries that are concerned with a possible tax spike by a large distribution late in the 10 year period might take out at least an annual RMD each year, if not more, without waiting for Regs going final.
Those in the above category who have a reason to defer distributions should wait until the Regs are final and they are officially required to take an RMD. If they distribute an assumed RMD that does not materialize it is unlikely they will be able to replace it like they were allowed to in 2020 with the CARES Act RMD waiver.
This will be more difficult to explain than pre Secure rules, none of which included annual RMDs along with a time deadline such as the 5 year rule. And the proposal only calls for certain beneficiaries to distribute these annual payments, not all of them. Finally, Regs are proposed and will not become final until late in the year, so this shapes up as a time consuming issue to address for advisors and plan beneficiaries late this year.