SECURE 2.0 developments and guidance for 2024

• Published in: The Tax Adviser Vol. 55; no. 1; pp. 22 - 28
• Main Authors: Adkins, Nell, Henderson, B. Charlene
• Format: Magazine Article Trade Publication Article
• Language: English
• Published: New York American Institute of CPA's 01-01-2024; American Institute of Certified Public Accountants
• Subjects: Age (Law); Allocation (Accounting); Certification; Compensation; Deferred compensation; Deferred tax (Accounting); Defined contribution plans; Disaster recovery; Employees; Employers; Fines & penalties; Individual retirement accounts; Laws, regulations and rules; Management; Provisions; Qualified tuition programs; Retirement income; Retirement planning; Retirement plans; Savings accounts; Student loans; Tax courts; Tax penalties; Taxation; Terminal illnesses; Wages & salaries
• ISSN: 0039-9957

A behemoth, SECURE 2.0 contains over 90 changes to retirement plan and tax law (versus the 30 or so in the SECURE Act) and myriad effective dates.3 Not surprisingly, further guidance is expected regarding its implementation, and calls for technical corrections and delayed effective dates are surfacing and being considered by congressional leaders and Treasury as of this writing. SECURE 2.0 was organized in seven titles: * Title I - Expanding Coverage and Increasing Retirement Savings (Sections 101-128); * Title II - Preservation of Income (Sections 201-204); * Title III - Simplification and Clarification of Retirement Plan Rules (Sections 301-350); * Title IV - Technical Amendments (Section 401); * Title V - Administrative Provisions (Section 501); * Title VI - Revenue Provisions (Sections 601-606); and * Title VII - Tax Court Retirement Provisions (Sections 701-702). A change to conform the limits of starter plans to those of IRAs seems a likely target for technical corrections. 529-plan-to-Roth-IRA rollovers For distributions in 2024 and later, act Section 126 allows beneficiaries of 529 college savings plans to roll over up to an aggregate of $35,000 of excess 529 plan funds to Roth IRAs throughout their lifetime. The 529 plan must have been open for at least 15 years, and the rollovers are subject to the annual Roth IRA contribution limit.16 Emergency savings accounts linked to retirement plans Uncertainty surrounding the possible need to tap into retirement savings for urgent financial needs often discourages retirement plan participation, because of the penalties associated with early fund withdrawals.