What's New: 2011 Cost-of-Living Adjustments

The 2011 Cost-of-Living Adjustments (COLAs) for determining annual limits for most retirement plans remain the same as in 2010, except for the following:

• The adjusted gross income (AGI) limits for determining the deductible amount of traditional IRA contributions for single and married taxpayers who are active participants in an employer-sponsored retirement plan (see "Deductions" );


• The AGI limits for determining the deductible amount of traditional IRA contributions for married taxpayers filing jointly who aren’t active participants in an employer-sponsored retirement plan but whose spouses are (see "Deductions") ;


• The AGI limits for determining the maximum Roth IRA contributions permitted for taxpayers whose filing status is married filing jointly (see "Phaseouts) and;


• The adjusted gross income limits for taxpayers who qualify for the 50% nonrefundable tax credit on qualified retirement savings contributions (see "Credit for Pension Contributions").

Click here for a table summarizing the applicable limitations.

What's New: 2010 Rules for Roth IRAs

Beginning January 1, 2010, the income and filing requirements for rollovers (including conversions) to a Roth IRA were eliminated. Additionally, for rollovers to a Roth IRA in 2010 only, a special 2-year option for reporting taxable portions of a rollover is available to taxpayers.

Previously, taxpayers were permitted to roll over (convert) a traditional IRA, SEP-IRA, SIMPLE IRA, and an eligible rollover distribution from an employer's retirement plan (other than from a designated Roth account) to a Roth IRA only if the following requirements were met:

• AGI for Roth IRA purposes was $100,000 or less; and


• tax filing status was not married, filing separate.

Under the new rules for 2010, regardless of income or filing status, individuals may roll over (convert) the following to a Roth IRA:

• a traditional IRA, SEP-IRA or SIMPLE IRA;


• an eligible rollover distribution from a 401(k), 403(b) (or similar plan, as permitted);


• an eligible rollover distribution to a beneficiary from a retirement plan.

For rollovers and conversions to a Roth IRA in 2010 only, taxpayers have the option of reporting all of the taxable portion of the rollover in 2010, or reporting half in 2011 and half in 2012.

Additional information about Roth IRA Conversions and Rollovers, Qualified Rollovers and the Taxation of Roth IRA conversions may be found in The Gold Book.

What's New: 2009 Required Minimum Distribution Waiver

The Worker, Retiree, and Employer Recovery Act of 2008  waives required minimum distributions  for 2009 from certain retirement plans.

In September 2009, the Internal Revenue Service provided guidance regarding this legislation. For example, the waiver of the RMD rules affects distributions for 2009 only. Also, for individuals who have taken their 2009 RMD, there are provisions that may allow the distributed amounts to be rolled over. For additional information and more details on this temporary waiver, see 2009 Required Minimum Distribution Waiver.

The guidance also provides amendment information and sample amendments for plan sponsors (see Pension Plan Required Amendments, RMD Waiver for 2009).

What's New: 2010 Reporting Changes for 1099-R & 5498

The IRS has updated Form 1099-R and Form 5498 for tax year 2009. While no substantive changes were made to Form 1099-R, Form 5498 has been enlarged and reformatted to provide additional boxes for the collection of Required Minimum Distribution information.

These changes may be found at Form 1099-R Reporting Instructions and Form 5498 Reporting Instructions.

What's New: 2010 Cost-of-Living-Adjustments

The 2010 Cost-of-Living Adjustments (COLAs) for determining annual limits for most retirement plans remain the same as in 2009, except for the following:

• The adjusted gross income (AGI) limits for determining the deductible amount of traditional IRA contributions for single and married taxpayers who are active participants in an employer-sponsored retirement plan (see "Deductions" );


• The AGI limits for determining the deductible amount of traditional IRA contributions for married taxpayers filing jointly who aren’t active participants in an employer-sponsored retirement plan but whose spouses are (see "Deductions") ;


• The AGI limits for determining the maximum Roth IRA contributions permitted for taxpayers whose filing status is married filing jointly (see "Phaseouts) and;


• The adjusted gross income limits for taxpayers who qualify for the 50% nonrefundable tax credit on qualified retirement savings contributions (see "Credit for Pension Contributions").

Click here for a table summarizing the applicable limitations.