Congress is expected to pass the Omnibus Spending Bill H.R. 2617 before year end. In addition to serving as the government funding bill for 2023, this bill includes many of the features of the House’s prior Secure Act 2.0 bill (H 2954), including raising the age be which required minimum distributions from a traditional individual retirement account must begin. In this bill, if an individual reaches age 72 after 12/31/2022 and is age 73 before 1/1/2033, the required beginning date will be April 1 of the year following the individual reaching age 73; and if an individual reaches age 74 after 12/31/2033 then the required beginning date is April 1 of the year following the owner reaching age 75.
As unclaimed property practitioners are aware, this would change the dormancy trigger date for traditional IRA accounts where statutes include the “date by which distribution is required to avoid a tax penalty” as a trigger. In addition, it would further the discrepancy between the age-based triggers set forth in the RUUPA inspired acts (either 70.5 or 72) and the ages at which distribution is actually required by the IRS.
Other SECURE Act 2.0 features of this bill that may be of interest to unclaimed property departments include its allowance for SIMPLE and SEP plans to be set up as Roth IRAs and allowance for the rollover of funds in a 529 account that has been established for 15 years into a Roth IRA.
