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ComplianceTax & AccountingSeptember 16, 2020

The SECURE Act of 2019 and the Bipartisan American Miners Act of 2019: IRS further explains miscellaneous IRA provisions


On September 2, 2020 the Internal Revenue Service (IRS) released Notice 2020-68 which provides guidance in the form of questions and answers with respect to certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 (i.e., the SECURE Act) and the Bipartisan American Miners Act of 2019. Specifically, this notice addresses the following issues relating to individual retirement accounts (IRAs):

  • Repeal of the maximum age restriction applicable to traditional IRA regular contributions (i.e., post-age 70½ contributions)
  • Qualified birth or adoption distributions
  • The exclusion of difficulty of care payments as compensation, and
  • Amendments

The following information summarizes the impact to IRAs explained in Notice 2020-68.

Section 107 of the SECURE Act: Post-age 70½ traditional IRA contributions

IRA custodians/trustees are not required to accept post-age 70½ traditional IRA regular contributions, however, they may choose to accept them. If an IRA custodian/trustee accepts these contributions, existing IRA owner agreements must be amended to allow for such contributions:

  • The IRA custodian/trustee is required to send an IRA amendment and a new disclosure statement to each existing IRA owner regarding the acceptance of post-age 70½ contributions. Furthermore, IRA custodians/trustees must deliver copies of the amendment to IRA owners no later than the 30th day after the later of the date on which the amendment is adopted or the date the amendment becomes effective
  • An IRA owner may not offset the amount of required minimum distributions from the IRA by the amount of post-age 70½ contributions for the same taxable year
  • In Q&A B-5 of the Notice the IRS provides an explanation by way of an example regarding the impact to an individual that makes both deductible traditional IRA regular contributions while age 70½ or older and utilizes the qualified charitable distribution provision

Section 113 of the SECURE Act: Qualified birth or adoption distributions from IRAs

An IRA owner may take a qualified birth or adoption distribution from his/her IRA and avoid the 10 percent early withdrawal penalty tax. However, the distribution is includable in gross income and subject to income tax. Additionally, any portion of the distribution amounts may be recontributed to an eligible retirement plan (i.e., an IRA):

  • Distributions must be made during the 1-year period beginning on the date which the child of the IRA owner is born or the legal adoption by the IRA owner of an eligible adoptee is finalized
  • The adopted individual must be either under age 18 or physically or mentally incapable of self-support
  • Physical or mental incapability is defined in Internal Revenue Code (IRC) Section 72(m)(7)
  • The adopted individual cannot be a child of the IRA owner’s spouse
  • The IRA owner must furnish the name, age, and the TIN of the adopted individual on the tax return for the year the distribution was taken
  • Each parent may receive a distribution of up to $5,000 per child. For example, if both parents are IRA owners and they have twins, each IRA owner could take a qualified birth or adoption distribution of $10,000

The Treasury and IRS intend to address the recontribution rules for these distributions, including rules related to the timing of the recontributions.

Section 116 of the SECURE Act: Difficulty of care payments

This provision allows an IRA owner to consider difficulty of care payments in the definition of compensation for purposes of making nondeductible traditional IRA regular contributions. The IRS has stated in this Notice that they will be addressing excess contributions that occur based on difficulty of care payments in future guidance.


This guidance provides insight into two important questions IRA custodians/trustees have with respect to IRA amendments:

  • The IRS expects to issue revised model Forms 5305 addressing changes made to the relevant IRC Sections as a result of the SECURE Act
  • The deadline to amend the document governing an IRA that is an IRA under either IRC section 408(a) or 408(b) for the provisions of the Secure Act or regulations thereunder is December 31, 2022 or such later date as the Secretary prescribes in guidance


As the IRS continues to provide additional guidance relating to the numerous IRA changes that have occurred over the last several months IRA custodians/trustees should consider reviewing their approach to maintaining compliance. Additionally, it is important for IRA custodians/trustees to provide IRA owners with the appropriate level of support without providing tax advice. For this reason, being familiar with the current rules is imperative to ensuring a level of comfort necessary to confidently work with IRA owners each day.

Organizations that subscriber to the Wolters Kluwer IRA Library or IRA Electronic Book (IRA E-Book) can find comprehensive guidance on IRAs and other tax-advantaged accounts within those publications.

Let’s get ready for IRA season. Find your amendments, establishment forms, SECURE Act brochure and more in the SECURE Act Resource Center.

Randy Heidmann
Senior Specialized Consultant, Tax Advantaged Accounts, Compliance Center of Excellence
With more than 40 years of industry experience, Randy Heidmann has helped hundreds of financial organizations create, implement and maintain their tax-advantaged accounts programs.