Disabled and Chronically Ill EDB Documentation
My sister found to be chronically ill some time ago and is receiving Social Security Disability benefits. Ian Berger’s August 15, 2024 article advises, “The final regulations also say that someone who has been found to be disabled by the Social Security Administration is automatically considered to be an EDB.” 1. Does this also apply to those found to be chronically ill?
The article goes on to note previously, “Documentation of disability or chronic illness.’ The SECURE ACT requires that documentation of disability or chronic illness be provided to the IRS custodian or plan administrator” seemingly referring to an employer plan, however due to privacy concerns, the IRS completely waived the certification requirement for IRA beneficiaries. 2. What if any documentation other than declared chronically ill by SSA is needed? No employer involved. Could not locate on the IRS site. Would certainly appreciate your take and thanks so much for this informative forum….
Permalink Submitted by Alan - IRA critic on Tue, 2024-09-03 11:12
As an IRA beneficiary who was on SSD as of the date of death, there is no additional documentation that must be submitted to an IRA custodian. She should be able to just inform the custodian that she is on SSD and will then be treated as an EDB, so will have to take annual RMDs every year. SSD is a safe harbor for which neither the IRA custodian nor the IRS should question.
Now if she had not received the SSD award as of the date of death, then it gets more complicated for her to document that she was disabled on the DOD, but it’s still possible depending on specifics.
To be clear, if disabled the chronically ill category can be ignored, since it just duplicates the EDB qualification she would already have per the disability.