Clarification of substantially equal periodic payment rule

Apr 21, 2023 | 2024, Retirement Plan Law

Current law imposes a 10% additional tax on early distributions from tax-preferred retirement accounts, but an exception applies to substantially equal periodic payments that are made over the account owner’s life expectancy. This provision provides that the exception continues to apply in the case of a rollover, exchange of an annuity providing the payments, or an annuity that satisfies the RMD rules.


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