Minimum required distribution rule modified. Beginning in 1997, the definition of the required beginning date used to figure the minimum required distribution from qualified retirement plans takes into account whether a plan participant has retired. The required beginning date of a participant (other than a 5% owner) who is still employed after age 70 1/2 is April 1 of the calendar year that follows the calendar year in which he or she retires. This does not apply to IRAs or 5% owners. For more information, see Tax on Excess Accumulation.

Repeal of 15% additional tax on excess distributions and excess retirement accumulation. If you receive retirement distributions from a qualified retirement plan after December 31, 1996, you are no longer subject to the additional 15% excise tax on excess distributions. Also, the additional 15% tax on excess retirement accumulations for taxpayers who died after December 31, 1996, is repealed.

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