IRA Plan Type Activation

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UIRAPT-01

Activate IRA Plan Types

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Access this screen by selecting Tool #414: IRA Plan Type Activation.

This screen is used to activate an IRA Plan Type so that a Dividend Application or CD Type can be configured for this IRA Plan.

Plan Types must be activated before they can be used to set up products or accounts.  This prevents users from accidentally coding an account with a plan type code that your credit union does not even offer, causing problems with verification and reporting later.  

Plan Types marked “Active” will be allowed when creating accounts and products.  Plan Types marked “Suspended” may have existing accounts coded with that plan type, but no new accounts can be opened.  Plan Types marked “Not offered” cannot be used when creating accounts or products.

The Deposit Limit shown for each account is used when the IRA Balance File is created, to indicate the maximum amount that can be deposited to the IRA plan during any given year. 

Catch-Up Contributions

As per usual, EOY processing floods the adjusted contribution limits when building the new year’s IRA and HSA balance records.  Beginning with 2017 year-end, the system began adding any catch-up contributions if the member meets the age criteria specified by the IRS.  Defaults are set to a catch-up contribution amount of $1,000, to apply to members aged 50 and above for Traditional and Roth IRA plans. These new limits are flooded to your member balance files on January 1 when the new tax year begins. 

NOTE: This change currently did not affect brand-new balance file records created during 2018 for members opening their first IRA or HSA account.  Those balance file records will be set up with the default contribution limits but will not include the catch-up amount automatically.  If the member wants to make catch-up contributions during the 2018 tax year, you’ll need to manually adjust their contribution limit.  Then during next year’s year-end cycle, the system will take over adjusting the limit to include the catch-up for eligible members.  

Upper Age Limit for Traditional IRA Contributions

Members who will reach age 72 during the tax year are given a contribution limit of $0 when the balance file record is created during beginning-of-year processing. This change was first active when the 2019 IRA balance file records are created on January 1, 2019. The age increased to 72 with 2020 tax year legislation.

Just like with the catch-up contribution, remember that this is just a starting point.  You are still able to manually adjust each individual member’s contribution limit as needed using Tool #896 Update IRA Balance Information.

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HSA Limits (F9)

Use this to see the Default Annual Contribution Limit for single and family HSA plans.

 

Link to ID: https://help.cubase.org/cubase/cubase.htm#UIRAPT-01.htm