What's New: 2009 Required Minimum Distribution Waiver

The Worker, Retiree, and Employer Recovery Act of 2008  waives required minimum distributions  for 2009 from certain retirement plans.

In September 2009, the Internal Revenue Service provided guidance regarding this legislation. For example, the waiver of the RMD rules affects distributions for 2009 only. Also, for individuals who have taken their 2009 RMD, there are provisions that may allow the distributed amounts to be rolled over. For additional information and more details on this temporary waiver, see 2009 Required Minimum Distribution Waiver.

The guidance also provides amendment information and sample amendments for plan sponsors (see Pension Plan Required Amendments, RMD Waiver for 2009).

What's New: 2010 Reporting Changes for 1099-R & 5498

The IRS has updated Form 1099-R and Form 5498 for tax year 2009. While no substantive changes were made to Form 1099-R, Form 5498 has been enlarged and reformatted to provide additional boxes for the collection of Required Minimum Distribution information.

These changes may be found at Form 1099-R Reporting Instructions and Form 5498 Reporting Instructions.

What's New: Power of Attorney Changes

The New York State legislature made sweeping changes to the Power of Attorney law, which went into effect September 1, 2009. The changes to the law require documents which are much more complex than the short form power of attorney under the old law. One major change, for example, is the use of a Statutory Major Gifts Rider for granting gifts of $500 or more. The new short form also affords principals increased protection by allowing the designation of co-agents as well as a person to monitor the agent. These changes and additional information on the new law can be found at New York Rules.

What's New: 2010 Cost-of-Living-Adjustments

The 2010 Cost-of-Living Adjustments (COLAs) for determining annual limits for most retirement plans remain the same as in 2009, except for the following:

• The adjusted gross income (AGI) limits for determining the deductible amount of traditional IRA contributions for single and married taxpayers who are active participants in an employer-sponsored retirement plan (see "Deductions" );


• The AGI limits for determining the deductible amount of traditional IRA contributions for married taxpayers filing jointly who aren’t active participants in an employer-sponsored retirement plan but whose spouses are (see "Deductions") ;


• The AGI limits for determining the maximum Roth IRA contributions permitted for taxpayers whose filing status is married filing jointly (see "Phaseouts) and;


• The adjusted gross income limits for taxpayers who qualify for the 50% nonrefundable tax credit on qualified retirement savings contributions (see "Credit for Pension Contributions").

Click here for a table summarizing the applicable limitations.

What's New: FDIC Insurance Coverage Increase Extended

Superseding the October 3, 2008 changes to FDIC insurance coverage, the FDIC has extended the temporary increase on deposits held at FDIC-insured institutions through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except for IRAs and other certain retirement accounts (including IRAs) which will remain at $250,000 per depositor.

FDIC extended its temporary Transaction Account Guarantee Program through June 30, 2010. This program provides depositors with unlimited coverage for noninterest-bearing transaction accounts at participating FDIC-insured institutions. The unlimited coverage applies to all personal and business checking deposit accounts that do not earn interest (including Demand Deposit (DDA) accounts), low-interest NOW accounts (NOW accounts that cannot earn more than 0.5% interest), Official Items, and IOLTA accounts.

Click here for information about the temporary extensions on these increases.