As you may have heard, Congress recently passed the Coronavirus Aid, Relief and Economic Security (CARES) Act. The Act was created to provide financial stability and relief for individuals and businesses affected by recent events.
While the Act is extensive and covers a broad range of areas and industries, we are actively working to review the bill in order to determine how it can potentially benefit our customers.
Changes to Retirement Accounts
Required Minimum Distributions on IRAs have been waived for the 2020 tax year. It is at your discretion whether you would like to take your distribution as normal, or if you would like to leave it in your IRA and forego taking a distribution for this year. Additionally, if you have already taken your 2020 Required Minimum Distribution, you have the option to roll it back into your IRA within 60 days of the distribution. This also applies to inherited IRAs.
Because of these changes, Western State Bank will not be initiating automatic IRA distributions as we may have done in the past. We will resume normal procedures to distribute RMD amounts to our customers in 2021. If you wish to take an IRA distribution for the 2020 tax year, please contact your local banking center and we’d be happy to initiate for you.
You may find it beneficial to know that the CARES Act also includes items such as an elimination of the 10% early withdrawal penalty up to $100,000 for qualifying individuals, as well as an increase in the amount that can be taken as a loan from a qualified retirement plan from $50,000 to $100,000 for 2020.
While our lobbies may be closed due to COVID-19 distancing measures, we are still available to assist you by phone or e-mail. Please do not hesitate to contact us if you have any questions or concerns regarding this development.