Federal Taxation of Retirement Income: Distributions, Rollovers, and RMDs After SECURE 2.0

About the course

Retirement distribution taxation runs on a set of interlocking rules that SECURE 2.0 rewrote in specific places. The RMD age thresholds moved to 73 and then 75 under IRC §401(a)(9). The 10-year rule under §401(a)(9)(H) changed inherited-IRA distribution planning fundamentally. The excise tax on missed RMDs dropped under §4974. Rollover mechanics under §402(c) and the once-per-year IRA rollover limitation still trip preparers who miss the timing rules. Early distribution penalties under §72(t) apply unless a specific exception is met — and the exceptions do not always show on the Form 1099-R the preparer receives.

This course covers the current-year retirement income framework. Coverage includes SECURE 2.0's changes to RMD age thresholds, the 10-year rule for inherited IRAs, the reduced §4974 excise tax on missed RMDs and the correction mechanism, direct rollover mechanics under §402(c), the 60-day rollover rule and the once-per-year IRA rollover limitation, early distribution penalties and exceptions under §72(t), and taxation of Roth conversions including back-door Roth transactions.

The course closes with the Form 1099-R and Form 5498 reporting requirements and the substantiation the taxpayer must retain to support rollover treatment or claim an early-distribution exception. Three hours of Federal Tax credit.

Learning objectives

By the end of this course, participants will be able to:

1. Identify the SECURE 2.0 changes to the required minimum distribution age thresholds under IRC §401(a)(9).
2. Recognize the 10-year rule for inherited IRAs under IRC §401(a)(9)(H) and identify the beneficiary categories subject to and exempt from the rule.
3. Distinguish between direct rollovers under §402(c) and 60-day rollovers, and identify the once-per-year IRA rollover limitation.
4. Identify the exceptions to the early distribution penalty under IRC §72(t) and the substantiation required to claim each.
5. Recognize the reporting mechanics on Form 1099-R and Form 5498 and identify the distribution code combinations that indicate different treatment.

Syllabus

1. SECTION 01The SECURE 2.0 RMD framework

   Age-73 and age-75 thresholds under §401(a)(9), the reduced §4974 excise tax on missed RMDs, and the correction mechanism a taxpayer uses to reduce the penalty further.

2. SECTION 02Inherited IRA distributions under the 10-year rule

   §401(a)(9)(H) mechanics, the beneficiary categories subject to the 10-year rule, the exceptions for eligible designated beneficiaries, and the annual RMD interaction within the 10-year window.

3. SECTION 03Rollover mechanics under §402(c)

   Direct rollovers, the 60-day rollover rule, the once-per-year IRA rollover limitation, and the reporting on Form 1099-R and Form 5498 that documents rollover treatment.

4. SECTION 04Early distributions under §72(t)

   The 10% additional tax on early distributions, the substantive exceptions available, and the substantiation the taxpayer maintains for each.

5. SECTION 05Roth conversions and back-door Roth transactions

   Taxation of conversions from traditional accounts to Roth accounts, the pro-rata rule under §408(d)(2), and the mechanics of back-door Roth transactions.

6. SECTION 06Distributions from 403(b) and 457(b) plans

   Distinctive rules for 403(b) and 457(b) plan distributions, including the 457(b) governmental plan early-distribution treatment and the coordination rules for participants in multiple plan types.

7. SECTION 07Form 1099-R and Form 5498 reporting

   Distribution code combinations, taxable amount computation, and the workpapers a preparer maintains to substantiate return treatment that departs from the reported code.

Instructor

Jennifer Harris Smith, JD, CPA. Attorney (Texas). CPA (Texas). Member of Texas Bar College. Full bio →