Starting in 2020 anyone of any age may now deposit money to an IRA if they have earned income such as a wage or self-employment. There are some other rules that may apply, but the old rule prohibiting deposits during or after the year turning 70 and ½ has been repealed.

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Beginning in 2020 the mandatory age to begin distributions from your IRA has been raised to 72 from the old, confusing age 70 and ½.  This law applies to distributions required to be made after December 31, 2019, with respect to individuals who attain age 70½ after such date.

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IRAs inherited from people (other than your spouse and a few other exceptions) who passed away after 2019 must now be distributed within 10 years of death. This does not affect situations where the IRA was inherited from someone who died before 2020.

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Stipends and fellowships now qualify the recipient to make IRA contributions.

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Up to $5,000 may be withdrawn from a retirement plan without penalty for the birth or legal adoption of a child, for up to one year after birth or adoption. The amount withdrawn is still taxable, but may be redeposited without penalty, and if redeposited within 60 days of withdrawal is not even taxable.

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Gross income does not include amounts received by a foster care provider as qualified foster care payments. A “difficulty of care” payment is compensation for providing the additional care needed for certain qualified foster individuals with physical, mental, or emotional disabilities. Since “difficulty of care” payments are excluded from gross income, taxpayers receiving only these payments have been unable to participate in retirement plans or IRAs. The new law increases the contribution limit to qualified retirement plans and IRAs to include “difficulty of care” payments. This change applies to contributions to IRAs made after the date of enactment of the Act and to defined contribution plans for plan years beginning after December 31, 2015.