WASHINGTON (1/13/09)--The Internal Revenue Service (IRS) has released Notice 2009-9 to provide guidance to financial institutions, including credit unions, on reporting required minimum distributions (RMDs) for 2009. The Worker, Retiree, and Employer Recovery Act of 2008 waives RMDs from individual retirement accounts (IRAs) and qualified retirement plans for 2009. Most IRA owners and beneficiaries who would have been required to take an RMD for 2009 are not required to take a distribution, says CUNA Mutual Group. Financial institutions also are required to report RMDs to the IRS and the IRA owner. Notice 2009-9 provides instructions for reporting these on Form 5498 and under the RMD reporting requirements of Notice 2002-27. The guidance indicates financial institutions that issue 2008 Forms 5498, IRA Contribution Information, should not put a check in Box 11. (Box 11 indicates to the taxpayer that an RMD is required in 2009.) If the financial institution issues a 2008 Form 5498 with the box checked, the IRS will not consider the statement incorrect--provided the financial institution notifies the IRA owner by March 31, 2009, that no RMD is required for 2009. In addition, the RMD statement required under Notice 2002-27 need not be sent to IRA owners for 2009, said CUNA Mutual. If an RMD statement is sent, it must reflect that the 2009 RMD is zero. As an alternative, the financial institution may send the IRA owner a statement showing the RMD that would have been required had RMDs for 2009 not been waived, along with an explanation of the waiver for 2009. “The IRS recognized the short amount of time financial institutions have to make programming changes to meet these requirements and issued very flexible guidance,” said Dennis Zuehlke, compliance manager for CUNA Mutual Group. By permitting financial institutions to separately notify their clients of the RMD waiver, in cases where they cannot modify their systems to reflect that RMDs are waived for 2009, financial institutions will not face penalties for noncompliance. Also, they will not incur additional expenses to adapt their data processing systems for this one-time change in the reporting requirements, Zuehlke said. CUNA Mutual serves 80% of credit unions offering IRA programs.
WASHINGTON (1/13/09)--More than 67 million credit union members have been matched with their congressional districts through Project Zip Code--a number that represents nearly 75% of the total 90 million members nationwide. "Being able to cite how many credit union members live in a particular congressional district or state is a very influential tool when credit union representatives want to make their cases to lawmakers," explained Elizabeth Furey, director of grassroots for the Credit Union National Association (CUNA). "The Project Zip Code information can help you get your foot in the door, and backs up your message by defining the number of voters who could be affected by a lawmaker's position on credit union issues," she added. Project Zip Code is one of a number of initiatives offered by CUNA to facilitate political involvement by credit unions. CUNA this week releases Version 9.0 of the software program. The improvements make the software easier to use, according to Furey. “It is important for credit unions to use every tool available to make their political voices heard," she said. As an added benefit, Project Zip Code information can be used by credit unions to help make decisions on where to locate ATMs and branches, noted Furey. Use the resource link below to learn more.