The program calculates required minimum distributions for the following types of accounts:
- Corporate and self-employed pension, profit sharing and stock bonus plans qualified under IRC Sec. 401(a) (includes Keogh or H.R. 10 plans, 401(k) plans, and employee stock ownership plans or ESOPs),
- Individual Retirement Accounts (IRAs) under IRC Sec. 408(a),
- Simplified Employee Plans (SEPs) under IRC Sec. 408(k), and
- Tax-sheltered annuities (except for account balances existing on 12/31/86 if kept separate for accounting purposes) under IRC Sec. 403(b).
- Roth IRAs
- Roth 401(k)s
For everything except a Roth IRA, the minimum distribution requirements generally apply when the owner of the plan reaches a certain age. Under the SECURE Act of 2019, birthdates that fall on or before 6/30/1949, this will be the 70½ year. The 70½ year is the year in which the plan owner attains age 70½. If the owner was born before July, this will be the year the owner turns 70. If the owner turns 70 after July, the next year will be the 70½ year. For birthdates that fall on or after 7/1/1949, this will be the year that the owner turns 72.
Minimum distributions depend on the life expectancies of the plan owner and a designated beneficiary. The calculated minimum distribution is the result of a simple calculation formula: Plan Balance divided by Life Expectancy. The complexity of the calculation arrives in determining the life expectancy to use.
See Calculating Minimum Distributions
