It was announced as part of one of the many tax act/stimulus packages released this year that anyone that would turn 70 1/2 in 2009 would not need to take the mandatory distribution. However if you chose to take your distribution at 70 1/2 that incomes is fully taxable at whatever your current tax rate is for that tax year.

Anyone electing to not take the distribution would not be penalized but would need to take the normal payment in 2010 as usual.