Purpose of the Bill

The purpose of this bill is to correct errors related to the taxable year designation of contributions made to individual retirement plans. It ensures that contributions are attributed to the correct taxable year, even if a mistake was made initially.

Main Provisions

• An annuity contract provider must treat contributions made to an individual retirement plan within the legally prescribed period as belonging to the preceding taxable year.
• This rule applies only if the retirement plan contributions are specified by the individual within three years from the original deadline for filing that year's tax return.
• The correction process specifically involves notifying the annuity contract provider about which tax year should be attributed to the contribution.

Significant Changes to Existing Law

• This legislation introduces a mechanism that allows individuals to correct any errors regarding the tax year designation of their retirement plan contributions, enhancing flexibility and ensuring accuracy in tax filings.

Relevant Terms

• Taxable year
• Individual retirement plan
• Annuity contract
• Contribution attribution
• Tax year designation correction