Brentmark Presents: Denise Appleby, MJ, CISP, CRC, CRPS, CRSP, APA
10 Key Rules for Mastering the SEPP Exception to the 10% Early Distribution Penalty for IRAs and Employer Plans Based on IRS Guidance Published in 2022.
The IRS recently issued Notice 2022-06, in which they provide guidance on distributions made under a substantially equal periodic payment (SEPP) program. Distributions taken under a SEPP program are exempt from the 10% early distribution penalty that applies to early distributions from IRAs and employer-sponsored retirement plans. Notice 2022-06 applies to SEPP payments that commence on or after January 1, 2023, and may also be applied to those that commence in 2022. Notice 2022-06 restates some of the existing SEPP rules and explains what has changed. This booklet covers the 10 key elements of Notice 2022-06.
The Purpose of SEPPs
Distributions taken from an IRA or account under an employer-sponsored retirement plan (employer plan) before the owner of the account (account owner) reaches age 59 ½ (early distributions) are subject to a 10% additional tax (early distribution penalty) unless an exception applies. The purpose of a SEPP program is for distributions taken under the program to qualify for an exception to this early distribution penalty.
Denise Appleby, MJ, CISP, CRC, CRPS, CRSP, APA, is a retirement plans consultant to financial, tax, and legal professionals. She is also a retirement plans trainer, freelance writer, editor, and owner of Appleby Retirement Plans Consulting, located on the Internet at http://www.applebyconsultinginc.com and the consumer free Website http://www.RetirementDictionary.com. Ms. Appleby's retirement-plans-related experiences include working as a retirement plans product manager, training manager, compliance consultant, technical help desk manager, and writer. She has written over 500 articles for many financial newsletters, including http://www.Investopedia.com, Pershing LLC's Sixty Something, The Pershing Press, Ed Slott's IRA Advisor, and as a Contributor at www.Forbes.com.
Ms. Appleby is a frequent speaker at seminars, where she explains the rules and regulations that govern IRAs and qualified plans—including how to prevent paying avoidable taxes and penalties on distributions from retirement plans. Ms. Appleby has appeared on CNBC's “Business News,” Fox Business Network, and numerous radio shows, as well as being quoted in the Wall Street Journal, Investor's Business Daily, CBS Marketwatch's Retirement Weekly, and other financial publications, where she gave insights on the rules and regulations that govern retirement accounts. She received a Masters of Jurisprudence (M.J.) in Employee Benefits from The John Marshall Law School and a B.A. in Sociology from Rutgers State University. She has earned the following professional designations: The Accredited Pension Administrator (APA) from the National Institute of Pension Administrators; the Certified IRA Services, Professional (CISP) designation from the Institute of Certified Bankers; the Chartered Retirement Plans Specialist (CRPS) designation from the College for Financial Planning; Certified Retirement Services Professional (CRSP) designation from the Institute of Certified Bankers; and the Certified Retirement Counselor (CRC) designation from the International Foundation for Retirement.
She is a contributing author of the following books:
She also publishes the Appleby’s Compilation of IRA Quick Reference Guide, which is updated annually.