On February 9, Congress passed, and the President signed into law, H.R. 1892, the “Bipartisan Budget Act of 2018” (the Budget Act, P.L. 115-123). In addition to providing a continuing resolution to fund the federal government through March 23, this 2-year budget contains a host of tax law changes. The Act retroactively extends through 2017 over 30 so called “extender” provisions, provides a number of miscellaneous tax-related provisions, and includes tax relief to victims of the California wildfires and Hurricanes Harvey, Irma, and Maria.
Relief from early withdrawal tax for California wildfire distribution. A distribution from a qualified retirement plan, a tax-sheltered annuity plan, an eligible deferred compensation plan of a State or local government employer, or an individual retirement arrangement (IRA) generally is included in income for the year distributed. In addition, unless an exception applies, a distribution received before age 59½ is subject to a 10% additional tax under Code Sec. 72(t) (the “early withdrawal tax”) on the amount includible in income.
In general, a distribution from an eligible retirement plan may be rolled over to another eligible retirement plan within 60 days, in which case the amount rolled over generally is not includible in income. The 60-day requirement can be waived by IRS in […]