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Beneficiary Type

Spouse Beneficiary: A spouse is an individual who is treated as the IRA owner's spouse under applicable state law on the date of the IRA owner's death.

Nonspouse Beneficiary: A nonspouse is any individual who is not a spouse.

Trust Beneficiary: For purposes of this tool, Trust Beneficiary includes any type of trust that is valid under state law.

Nonperson Beneficiary: A nonperson beneficiary includes the IRA owner’s estate, or an entity including (but not limited to) organizations such as a church, college/university, or other charitable organization. For purposes of this tool, a trust is not considered a nonperson beneficiary.

IRA Type

Traditional IRA: Contributions to a Traditional IRA, in some cases, may be fully or partially deductible. In addition, growth that occurs within a Traditional IRA (including income and gains) accumulates on a tax deferred basis and is not taxed until distributed.

Roth IRA: While there is no tax deduction for Roth IRA contributions, the return of contributions from Roth IRAs is never taxed at the time of distribution. In addition, growth that occurs within the Roth IRA (including income and gains) may also qualify for tax-free distribution if certain requirements are met at the time of distribution.

SEP IRA: A SEP IRA is a Traditional IRA which receives tax-deferred contributions (generally employer contributions) under an employer SEP (simplified employee pension) plan. Amounts within a SEP IRA grow tax deferred and are not taxed until distributed.

SIMPLE IRA: A SIMPLE IRA is an IRA that receives tax-deferred contributions (i.e., salary deferrals and employer contributions) under an employer SIMPLE (savings incentive match plan for employees) plan. A SIMPLE IRA can only receive SIMPLE IRA contributions. Amounts held within a SIMPLE IRA grow tax deferred and are not taxed until distributed.

Nonspouse Beneficiary Criteria

Minor Child of Deceased IRA Owner: An individual is a Minor Child of Deceased IRA Owner Eligible Designated Beneficiary if the individual is a child of the IRA owner and has not yet attained the age of 21 on the date of the IRA owner’s death.

Disabled Eligible Designated Beneficiary: An individual is a Disabled Eligible Designated Beneficiary if no later than October 31 of the calendar year following the IRA owner’s death, the beneficiary provides qualifying documentation to the IRA provider that

  1. as of the date of the IRA owner’s death, the beneficiary is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or to be of long-continued and indefinite duration (applicable only if the beneficiary was age 18 or older as of the date of the IRA owner’s death),
  2. as of the date of the IRA owner’s death, the beneficiary has a medically determinable physical or mental impairment that results in marked and severe functional limitations and that can be expected to result in death or to be of long-continued and indefinite duration as of the date of the IRA owner’s death (applicable only if the beneficiary was not yet age 18 as of the date of the IRA owner’s death), or
  3. the social security administration determined the beneficiary to be disabled as of the date of the IRA owner’s death.

Chronically Ill Eligible Designated Beneficiary: An individual is a Chronically Ill Eligible Designated Beneficiary if no later than October 31 of the calendar year following the IRA owner’s death, the beneficiary provides qualifying documentation, certified by a licensed health care practitioner, to the IRA provider that as of the date of the IRA owner’s death

  1. the beneficiary is unable to perform (without substantial assistance from another individual) at least 2 activities of daily living (i.e., eating, toileting, transferring, bathing, dressing and continence) for an indefinite period which is reasonably expected to be lengthy in nature (and not merely for 90 days) due to a loss of functional capacity,
  2. the beneficiary has a level of disability similar (as determined under regulations prescribed by the Secretary in consultation with the Secretary of Health and Human Services) to the level of disability described in (1), or
  3. the beneficiary requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.