Durbin, Colleague Introduce Bill to Protect Seniors Income and Retirement During Coronavirus Pandemic
Senators introduce legislation that waives tax penalties for seniors and retirees
WASHINGTON – U.S. Senator Dick Durbin (D-IL), along with Senator Edward J. Markey (D-MA), today announced legislation aimed at protecting seniors and retirees during the economic downturn as a result of the coronavirus pandemic. The bill will suspend the penalty on Required Minimum Distribution (RMDs) for retirement accounts for calendar year 2020.
“As we continue to address the threat of the coronavirus pandemic, protecting the financial viability of our seniors and retirees is critically important. The bill introduced today makes a commonsense step that will protect Illinois’ seniors’ income and retirement benefits, and we urge our Senate colleagues to seriously consider this proposal,” said Durbin.
The legislation would suspend the penalty on Required Minimum Distribution (RMDs) for retirement accounts for calendar year 2020. Current law requires individuals over 72 to withdraw a certain percentage of tax-deferred retirement accounts each year, or face a 50 percent tax penalty on the required withdrawal amount. For 2020, the RMD calculation is based on an account balance of December 31, 2019. However, since January 1 the S&P 500 stock market index is down nearly 25.5 percent, meaning that seniors will be forced to deplete a far larger percentage of their retirement accounts than anticipated, or face penalties. The legislation would suspend the RMD requirement and waive the 50 percent tax penalty for calendar year 2020.
A copy of that legislation can be found here.
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