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IRA Reform and Health Care Transparency Signed Into Law

Posted by State Senator Jim Sullivan on March 15, 2010 | 4 comments

Health Care Transparency Bill, Governor Doyle, IRA Reform, Roth IRA, Sullivan

Hey everybody, thanks for all the interest in my latest Health Care Transparency blog. The governor signed the bill last week, so it will become effective in January 2011. To give you an idea of what those Top 25 lists will look like, here’s a generic sample of how a few items would read:

As with any health care related bill, the language of the legislation itself is pretty complex, so call my office if you have additional questions. The number is 866-817-6061. You can also check out SenatorSullivan.com for updates.

Governor Doyle also signed the IRA Reform Act (Senate Bill 439) into law during a ceremony at the Capitol today. The bill, which I authored, is a comprehensive reform package that will make state law consistent with the federal tax code, encourage people to invest in their retirement, and help members of the military at the same time.

One of the most important components of the IRA Reform Act is that it allows all individuals, regardless of their income level, to convert to a Roth IRA penalty free. It also makes Wisconsin retirement contribution limits match federal law, ensuring Wisconsin residents can continue to contribute the maximum amount to retirement accounts.

In addition, the IRA Reform Act adopts federal changes made in the Heroes Earning Assistance and Relief Tax (HEART) Act of 2008. These changes would exempt Guard members and U.S. military reserves from certain IRA penalties, including withdrawal penalties, if they are called to active duty for more than 179 days. It also allows military death benefits to be added to a Roth IRA notwithstanding the annual contribution limits, provides for reservists called to active duty to withdraw funds from their health flexible spending accounts without incurring penalties, and excludes from gross income any state or local bonus payment made to military families if their payment is related to their service in a combat zone.

I've had conversations with constituents, CPAs and financial planners who overwhelmingly support removing barriers to planning for retirement. Instead of charging individuals looking to improve their future financial stability, we should do what we can to encourage people to invest in their retirement.

Today's bill signing ceremony also gave me a chance to give a special thanks to Joel Guthmann, a Wauwatosa tax accountant, who brought this issue to my attention.  I really appreciate Mr. Guthmann's contribution. When citizens take the time to bring important ideas to the Legislature, the entire state can benefit economically.

If you have questions about the IRA Reform Act, send me an email at Sen.Sullivan@legis.wisconsin.gov.