Important Notices for Members with Individual Retirement Accounts

Important Notices for Members with Individual Retirement Accounts (IRAs)

  • IRA balances as of December 31, 2018 are considered Fair Market Value, and will be the amount that Glass City will report to the Internal Revenue Service (IRS).
  • Withholding Notice for IRA Periodic Payments:
    We are required by law to send a Withholding Notice to any member receiving an IRA Pre/Post 70½ Distribution from the credit union. Whether or not you currently have Federal taxes withheld from your IRA Periodic Payment, no change will be made unless you contact the credit union.

    Payments from your IRA are subject to Federal income tax withholding, unless you elect no withholding. You may change your withholding election at any time prior to your receipt of a payment. To change your withholding election, contact the credit union at 419-887-1029 for the appropriate form, or visit your nearest branch.

    Withholding from IRA payments, when combined with other withholding, MAY relieve you from payment of estimated income taxes. However,  our withholding election does not affect the amount of income tax you pay. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are insufficient.

  • IRA One-Rollover-Per-Year Rule:
    Per the IRS, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own. The limit will apply by aggregating all of an individual’s IRAs, including Simplified Employee Pension (SEP) and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit.
    • Trustee-to-trustee transfers between IRAs are not limited
    • Rollovers from traditional to Roth IRAs (“conversions”) are not limited
    • Direct Transfers of IRA money are not limited: This change won’t affect your ability to transfer funds from one IRA trustee directly to another, because this type of transfer isn’t a rollover. The one-rollover-per-year rule of Internal Revenue Code Section 408(d)(3)(B) applies only to rollovers.
  • Donating IRA Contributions to Charity:
    Congress has made permanent the option of making direct contributions from an IRA to charity; therefore, if you are age 70 ½ or older, you can transfer up to $100,000 annually from your IRA to charity. Such transfers count as part of your required minimum distribution. Unlike other payouts from traditional IRAs, direct donations don’t count as taxable income, so they can’t reduce the value of your itemized deductions or personal exemptions, or trigger a Medicare premium surcharge. Of course, you won’t be able to also deduct direct IRA donations.

 

For further details, visit www.irs.gov.

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Glass City Federal Credit Union is part of Shared Branching—a network of credit unions across the country that actually shares their branches with each other. As a Glass City member, you can use any other participating credit union’s branch for most deposits, withdrawals, loan payments, transfers, and other transactions.