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...
Rollover
Updating dollar limit for mandatory distributions
Under current law, employers may automatically roll over former employees’ retirement accounts from a workplace retirement plan into an IRA if their balances are between $1,000 and $5,000. The $5,000 limit will now be increased to $7,000.
Special rules for certain distributions from long-term qualified tuition programs to Roth IRAs
Amends the Internal Revenue Code to allow for tax and penalty free rollovers from 529 accounts to Roth IRAs, under certain conditions. Beneficiaries of 529 college savings accounts would be permitted to rollover up to $35,000 over the course of their lifetime from any...
Exemption for certain automatic portability transactions
Currently, in most cases, a plan may distribute a terminated participant’s account balance without their consent if the balance is under $5,000 – a “force-out” distribution. Current law also requires an employer to roll over this distribution into a default IRA if the...