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Pennsylvania Reaffirms Reporting Standards for Retirement Accounts

Posted By Administration, Wednesday, September 11, 2019
Updated: Wednesday, September 11, 2019

Brian Munley, Pennsylvania's director of the bureau of unclaimed property, recently issued a notification and reminder of the state’s Policy Guidance – Reporting Standards for Fiduciary Accounts. The notice reaffirms that Pennsylvania's guidance from September 2016 is still in effect and should be followed until further notice from the state. 

 

Following is Pennsylvania’s September 2019 notification:

 

In September 2016, in response to amendments made to the Commonwealth’s Disposition of Abandoned and Unclaimed Property Law, Treasury issued a Policy Guidance with a particular emphasis designed to ensure that IRAs and other types of retirement account owners would not be subject to negative tax treatment as a consequence of an escheatment of retirement-related assets to the Commonwealth. This Guidance protects an account owner under the age of 59 ½ by preventing the reporting/distribution of certain re-tirement accounts which my otherwise be subjected to the Internal Revenue Code’s 10-percent additional tax for early distributions. IRC §72(t)(2)(A)(i).

 

The following is a restatement of the Policy Guidance, which remains in full force and effect: 

Treasury will neither demand nor accept any retirement account that is presumed abandoned and unclaimed, except as follows:

  1. An individual retirement account (including a retirement plan for self-employed individuals) of which the beneficiary cannot be located for a period of three (3) years following the death of the owner and that is not subject to a mandatory distribution requirement; or
  2. An individual retirement account (including a retirement plan for self-employed individuals) of which the owner has attained seventy and one-half years of age and is not subject to a mandatory distribution requirement.

Accordingly, until further notice, retirement accounts are to be reported only if either of the above requirements are satisfied. It is Treasury’s objective to prevent the reporting of property that is not truly abandoned or unclaimed. In so doing, Treasury notes its authority to exercise its discretion to refuse the acceptance of certain types of unclaimed property. §72 P.S. §1301.17.

 

Questions pertaining to this notification may be directed via email to bmunley@patreasury.gov.

Tags:  Pennsylvania  retirement accounts  unclaimed property 

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