RMD suspended for 2009

The new Worker, Retiree and Employer Recovery Act of 2008 was passed and signed into law by President Bush in December 2008.  The law provides a break for elderly taxpayers who normally have to take their RMD (required minimum distribution) from their IRAs and other qualified plans each year.  These RMDs have been suspended for 2009.

This does not apply to RMDs that have been postponed from 2008.  If you missed fulfilling the 2008 RMD, you are not exempt.  You must still complete the RMD withdrawal plus and resulting penalties to the IRS.  Also, if you turned 70 1/2 in 2008, you have until April 1, 2009 to fulfill your 2008 RMD.  For your first distribution, you may wait to take that distribution until April 1st of the year after you turn 70 1/2.