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© SEI 2022 For Intermediary Use Only. Do Not Distribute. 4 1. Have there been regulatory changes that will impact tax forms and other information issued for the 2022 tax year? There were no significant changes for 'Taxable' accounts or IRA's for the 2022 tax year. On December 29 th , the 'Secure act 2.0' was passed. This law includes many changes to retirement plans, including IRA's. The most immediate is the RMD age was raised from 72 to 73 in 2023; the RMD age will eventually be raised to 75. IRA owners who already reached their RMD age prior to 2023 will need to keep taking RMD's as normal. The law also included a reduction of the RMD excise tax for 'missed' RMD's from 50% to 25%, additional early withdrawal penalty exceptions, and various changes for Roth retirement plans. Separately the IRS made changes to federal withholding elections in regards to IRA distributions; these new rules go into effect January 1 st 2023. The default for federal withholding on taxable distributions is still 10%. But for new withholding elections, IRA Owners must make the election as a whole percentage number; no Fractional percentages and no flat dollar amounts. IRA Owners can now elect less than 10%, down to 1%. Any existing federal withholding elections are unchanged, even if they don't meet the updated rules. Please be aware of the SECURE Act of 2019 and its impact to IRAs and Required Minimum Distribution's (RMD's). The major IRA changes of the SECURE Act were that the starting age for RMD's for Traditional, SEP, and SIMPLE IRA's was raised to 72, the age cut-off for making Traditional IRA contributions was removed, and the Inherited beneficiary elections available to most non-spouse beneficiaries were changed. A client still must have earned income to contribute to an IRA. Also note the CARES Act of 2020, which created a 'Coronavirus Related Distribution' (CRD) that qualifying individuals could take in 2020. If the IRA Owner took this distribution in 2020, this distribution can be repaid to the IRA per the guidelines provided in the CARES Act over a 3 year period. 2023 will be the last year an IRA owner can re-pay this distribution. The IRA Owner should work with their tax preparer to make sure they properly claim any penalty exemptions and tax exemptions from performing this repayment. 2. Questions regarding cost basis A. What is a covered security? A security is considered covered if 1) the security is purchased or acquired after its corresponding asset effective date or 2) the asset and related cost basis is transferred to the account from an account in which that asset was a covered security. The effective dates for assets are as follows: Stocks (other than stocks held in a regulated investment company [RIC] or dividend reinvestment plan [DRP]) – January 1, 2011 Mutual funds, DRPs, and RICs – January 1, 2012 All other specified securities including fixed income and options – January 1, 2014. B. What is a non-covered security? A security is considered non-covered if 1) the security was purchased or acquired before its corresponding applicable date or 2) the asset and related cost basis is transferred to the account from an account in which that asset was a non-covered security C. What types of securities are subject to reporting? According to the IRS, specified securities include stock, mutual funds, ETF's, notes, bonds, debentures and other evidence of indebtedness, commodities, commodity contracts or derivatives, and any other financial instrument for which the Secretary determines reporting adjusted basis is appropriate. D. How will SPTC report this information? For all covered securities that were sold during 2022, SPTC will issue a 1099-B and file a return with the IRS stating the gross proceeds from the sale, the customer's adjusted cost basis in the security, and whether or not any gain or loss from the sale is short-term or long-term. If the security is non-covered, SPTC will only report the sale proceeds to the IRS. The client must still track and report the cost basis to the IRS and determine their Gain/Loss. SPTC will provide the cost basis, if known, in the tax information statement that follows the 1099B, but this information will not be reported on the 1099B since it is not reported to the IRS. For fixed income securities, the market discount will be reported to the IRS at the sale or as accrued. The 1099-OID and 1099-INT will report market discount and acquisition premium.

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