The SECURE ACT ended up passing when President Trump signed it into law as part of the government’s spending bill.
VISIT HERE, to learn the about the impact the SECURE ACT will have on solo 401k plans, IRAs and ROBS 401k plans.
Time is ticking for the SECURE ACT to pass in 2019. While the bill was easily approved by the majority of the House in May, it has stalled in the Senate all year. Both the House and the Senate returned this week from their Thanksgiving holiday so only three weeks remain to pass the bill in 2019. Sen. Ben Cardin (D-MD) who is a big proponent of the bill stated in November at the AICPA National Tax Conference in Washington that the SECURE Act most likely won’t pass in 2019.
While attempts have been made to expedite the passage of the bill in the Senate, both parties have rejected it. Essentially, the Senate wants to make particular changes to existing bill passed by the House. Some of these changes include striking a provision providing pension funding relief for certain community newspapers that are struggling financially, as well as adding a provision that would expand Section 529 accounts to include home schooling expenses.
There is always next year in 2020 if the SECURE Act does not pass in 2019 in the few weeks remaining when he government meets to vote on the omnibus bill that would fund the government for the remainder of FY 2020.
If it fully passes, The SECURE ACT would result in the following big changes for solo 401k plans, IRAs and ROBS 401k plans:
1. 401k plans including solo 401k plans could be adopted by the business tax return filing deadline instead of by December 31.
2. Extending the required minimum distribution (RMD) from age 70 1/2 to age 72 for IRAs and 401k plans.
3. Long-term part-time works could participate in 401k plans.
4. Traditional IRA contributions could be made past age 70 1/2; thus, resulting in allowing for the back-door Roth IRA past age 70 1/2.
5. The 10% early distribution penalty (distributions prior to age 59 1/2) would not apply to IRA distributions made for the purpose of using the funds to pay for “qualified birth or adoption distributions.”
6. The 10 year rule would apply to decedent accounts (both 401ks and IRAs). The retirement accounts would need to be fully distributed by the non-spouse beneficiary by the end of the tenth calendar year following the participant’s death, so the stretch IRA would essentially no longer apply to non-spouse beneficiaries.