A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Chadmere Capital Inurance and Financial Services, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Chademere Capital Insurance and Financial Services
(803) 242-1050

CLOSE

IRS DELAYS EFFECTIVE DATE OF IRA SELF-CORRECTION PROGRAM

By Ian Berger, JD
IRA Analyst
Follow Us on Twitter: @theslottreport

It looks like IRA owners will probably have to wait awhile to take advantage of a new program that allows them to self-correct IRA errors that previously couldn’t be fixed. In Notice 2023-43, the IRS said that self-correction for IRAs can’t be used until the IRS issues rules for the new program. And those rules aren’t required to be issued until the end of December 2024.

For a number of years, the IRS has had in effect a procedure – the Employee Plans Compliance Resolution Program (EPCRS) – that allows employers to fix certain tax code violations made by their retirement plans. The existing SECURE 2.0 legislation from last December loosened EPCRS to make self-correction for plans even more widely available. But employers have been in a bind because they didn’t know which rules to follow if they wanted to use EPCRS before the IRS publishes its new rules. Notice 2023-43 addresses this by giving interim guidance for companies to use during this transitional period.

SECURE 2.0 also expanded EPCRS to cover IRA errors for the first time. But since there’s no existing EPCRS rules for IRAs, Notice 2023-43 says the program won’t be available for IRAs until the IRS publishes guidance – which may not happen until December 2024.

Pending the expansion of EPCRS, IRA owners already have the ability to fix certain IRA mistakes. For example, since 2016 the IRS has permitted “self-certification” to remedy rollovers made after the 60-day deadline if the delay was on account of certain reasons. In addition, penalties for missed required minimum distributions (RMDs) and excess IRA contributions can be avoided if the IRA owner takes proper steps to fix the error.

With the extension of EPCRS, a wider list of IRA errors will eventually become available for self-correction. But it’s not clear just how wide this expansion will be. SECURE 2.0 says that IRA self-correction will allow “custodians to address” IRA errors. Does this mean that self-correction will be limited to mistakes made by custodians or will it also cover errors made by IRA owners or beneficiaries that can be fixed by custodians?

Whatever the case, the new self-correction program for IRAs probably won’t be effective anytime soon.

https://www.irahelp.com/slottreport/irs-delays-effective-date-ira-self-correction-program

Ready To Take

THE NEXT STEP?

 

For more information about any of our products and services, schedule a meeting today.

Or give us a call at (803) 242-1050

Investment advisory services offered through Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser. Nothing on this website constitutes investment, legal or tax advice, nor that any performance data or any recommendation that any particular security, portfolio of securities, transaction, investment or planning strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations, execution of required documentation, and receipt of required disclosures. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD #175083.

 ADV Part 2A & Form CRS              Privacy Policy