What: SECURE 2.0 changes applicable laws to allow individuals to receive distributions from their retirement plan in the case of birth or adoption without paying the 10% additional tax
Action Required:
Key Dates: Effective to distributions made after 12/29/2022 and retroactively to the three-year period beginning on the day after the date on which such distribution was received
Impacted Audiences: Participants utlizing funds from their 401(a) defined contribution plan, 457(b) plan or IRA to pay for qualified birth or adoption-related costs (this change may affect other plan types not offered by MERS)
For More Information: Click "Read More" below
Key Information:
Repayment of Qualified Birth or Adoption Distribution
SECURE 2.0 includes a provision that allows individuals to receive distributions from their retirement plan in the case of birth or adoption without paying the 10% additional tax. Distributions can be repaid to a retirement plan or IRA and are treated as timely rollovers. SECURE 2.0 now restricts the re-contribution
period to three years.
This change is effective to distributions made after 12/29/2022 and retroactively to the three-year period beginning on the day after the date on which such distribution was received and protects the tax benefit to participants when they repay the distribution.
More information: MERS SECURE 2.0 Resource Page