Pre-59 ½ Distributions Screen

[Kathleen Reynolds]

#3254

To include Pre-59½ Distributions in an analysis, enter data in the Pre-59½ Distributions Calculator. An image of the calculator appears below. If you need help entering data into the calculator, click the part of the image that you need help with. To access the Pre-59½ Distributions Calculator, click the Pre-59½ button on the toolbar. To enter assumed dates of death for the owner and beneficiary, click Assume Death Occurs in the Main window.

• Starting Date: Enter the Starting Date. When the Distribution Frequency is Semiannual, Quarterly, or Monthly, the Starting Date determines the date of the first pre-59½ distribution.
• Distribution Year: For most cases, this input should be the same as the year of the Starting Date. However, if your client started taking Pre-59½ Distributions in a previous year, you can use this input to calculate the distributions for the current year. Set the Starting Date to be when Distributions started, and enter the current year as the Distribution Year.
• IRS Notice 2022-6
• Use Rev. Rule 2002-62
• Distribution Method
• 1/20xx Balance: The account balance that is used to determine payments must be determined in a reasonable manner based on the facts and circumstances. For example, for an IRA with daily valuations that made its first distribution on July 15, 2021, it would be reasonable to determine the yearly account balance when using the required minimum distribution method based on the value of the IRA from December 31, 2020 to July 15, 2021. For subsequent years, under the required minimum distribution method, it would be reasonable to use the value either on the December 31 of the prior year or on a date within a reasonable period before that year’s distribution.
• Expected Plan Growth:Enter the expected annual percent increase of the plan. The Expected Plan Growth is only used for projections.
• Distribution Frequency: Select a Distribution Frequency. Plan owners can make Annual, Semiannual, Quarterly, or Monthly pre-59½ distributions.Depending on the Distribution Frequency, the program calculates the Plan Balance differently. For example, if the Distribution Frequency is Annual, the growth is compounded only once each year. If it is Semiannual, compounding occurs twice. If it is Quarterly, compounding occurs four times each year. And if it is Monthly>, then compounding occurs every month.
• Joint or Single Life Expectancy
• Owner’s/Beneficiary’s Birth Date: Enter the Birth Date of the Owner in month/day/year format. If an owner’s birth date is before 1917, the program displays a warning in the Hint Line. The minimum distributions rules for owners with birth dates prior to 1917 are more complex and may be different from the current rules. Therefore, the program bases its calculations on minimum distributions rules after 1917 (see Proposed Treas. Reg. Sec.1.408-8 for IRAs and 1.401(a)(9) for Qualified Plans).
• Interest Rate
• Use Uniform Lifetime Tables (2002-2021)
• Use Uniform Lifetime Tables (2022+)
• Distribution Desired

For additional information regarding Pre-59½ Distributions, click here.
For information on the Pre-59½ report, click here.

[Author]

Posts