On May 23, 2019, the House of Representatives have passed H.R. 1994, known as the SECURE Act, a bill that aims to improve the nation’s retirement savings, moving it a step closer to becoming law. The bill includes a variety of provisions intended to increase the ability and accessibility to save for retirement. The SECURE Act includes the following provisions relating to IRAs:
- Treat certain taxable non-tuition fellowship and stipend payments and nontaxable “difficulty of care” payments received by home healthcare workers as compensation for IRA contribution purposes
- Repeal the maximum age for making Traditional IRA contributions
- Allow penalty-free withdrawals in the event of birth or adoption of a child from retirement plans
- Increase the required minimum distribution age from 70½ to age 72
- Require non-spouse beneficiaries (with some exceptions) to withdraw inherited balances from IRAs (and defined contribution plans) within 10 years of the death of the account owner
- Increase penalties for failure to file certain information returns
With the SECURE Act’s passage, it will now head to the Senate, where a similar bill, the Retirement Enhancement and Savings Act (RESA), S. 972, has yet to be voted out of committee.