Required Minimum Distributions
This guide has been updated for the SECURE 2.0 Act
Pre-SECURE Act Rules
With the advent of the 2019 SECURE Act, the RMD requirements are different for years after 2019 and before 2020. This guide retains the pre-2020 rules but locates them at the end of this guide.
Overview
Required Minimum Distribution (RMD):
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Applies to employer sponsored retirement plans and IRAs.
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Beginning date is generally the later of the following:
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Year in which the taxpayer reaches age 72 for years 2021-22 (73 for year 2023 through 2032), or
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In the case of qualified plans, the year of retirement.
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Can wait until April 1st of the following year – but must take two distributions in that year.
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Generally, use the Uniform Lifetime Table (except when spouse is more than 10 years younger).
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Annual RMD = (Account Balance 12/31 of Prior Year)/(Distribution Period from IRS table)
Penalty:
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Pre-2023: 50% of the amount that should have been withdrawn and wasn’t.
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Post-2022: 25% of the amount that should have been withdrawn and wasn’t or 10% if timely corrected.
Penalty Abatement – Pre-2023, possible with reasonable cause and corrective distributions.
Delayed Check Cashing – Rev Rul 2019-19
Related IRC and IRS Publications and Forms
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Pub 575 - Pension and Annuity Income
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Pub 590-B - Distributions from Individual RetirementArrangements (IRAs)
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Form 5329 - Additional Taxes on Qualified Plans &IRAs
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Sec 401(a)(9) -Required Distributions
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Sec 408(d)(8) -Qualified Charitable Distributions
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Secure ActSecure 2.0 Act