Amendments to Traditional & Roth IRA Disclosure Statements

Some of the terms and conditions of your IRA have changed due to changes in tax law.  These changes are a result of the passage of the Tax Cuts and Jobs Act in December 2017 and the Bipartisan Budget Act in January 2018.  The changes are summarized below.  No action is required on your part.  If you would like a full copy of the amended disclosures, please call Member Services at 860-292-2940.

Early Distribution Penalty

Generally, an IRA owner under the age of 59 ½ is subject to an early distribution tax of 10%.  There are some exceptions to the early distribution tax.  Under the new laws, if you are unemployed and have received federal or state unemployment wages for 12 consecutive weeks, you may take distributions from your Traditional or Roth IRA and may not incur the early distribution tax.

Rollover Extension

IRA owners may roll over funds from an eligible employer-sponsored retirement plan.  The rollover generally must be completed within 60 days of withdrawal from the retirement plan.  In the case of a plan loan offset due to termination of the plan or employment, the deadline for completing the rollover is your tax return due date for the year in which the withdrawal from the retirement plan occurred. 
For Traditional IRA owners, you may alternatively claim the withdrawal as income and pay any applicable income tax or early distribution tax.

Ability to Roll Over IRS Levy

If funds are returned to you from an eligible retirement plan that had been wrongfully levied, you may roll over the returned amount until your tax return due date for the year that the funds were returned.   

Elimination of Certain Recharacterizations

A recharacterization is when an IRA owner changes how a contribution is treated, as either a Traditional or Roth IRA contribution.  When an IRA owner changes a Traditional IRA contribution to a Roth IRA contribution, it is then considered a Roth conversion. Effective for tax year 2018, you may not recharacterize a Roth IRA conversion.