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Forbes: there will be no 2008 required minimum distribution waiver

December 19, 2008

Forbes reports that there will be no waiver for 2008 of the rules requiring minimum distributions from IRAs and retirement plans (via Kay Bell). There have been calls to waive the 2008 RMD requirement because of the stock market decline during the year; the distribution is based on account values at the end of 2007, and is mandatory for taxpayers who reach age 70 1/2 by the end of 2008. Forbes bases its report on a letter from the Treasury to Congresscritters who have called for a 2008 waiver.

This means if you haven't taken your distribution yet, you need to get it done. The tax law imposes a 50% excise tax on RMD shortfalls. If you just turned 70 1/2 this year, you have until April 1 to take the distribution; older taxpayers have to take it by December 31.

Congress has waived the RMD rules for 2009, but the waiver does not apply to the distributions that can be taken by April 1 for taxpayers reaching age 70 1/2 this year.

Required distribution relief: thanks for not much.

Remember to take your 2008 required minimum distribution from your IRA

Tags: Required Minimum Distribution.year-end tax planning.