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Retirement Planning > Spending in Retirement > Required Minimum Distributions

IRS: Heed These RMD Deadlines or Face Penalties

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The Internal Revenue Service on Monday reminded taxpayers born in 1950 or earlier of important upcoming deadlines for required minimum distributions to avoid penalties.

RMDs are minimum amounts that many retirement plan and IRA account owners must generally withdraw annually after they reach age 72. RMDs are taxable income and may be subject to penalties if not timely taken.

As the IRS explains, account owners can delay taking their first RMD until April 1 following the later of the calendar year they reach age 72 or, in a workplace retirement plan, retire.


Account holders with a traditional IRA, and SEP, SARSEP (a type of simplified employee pension), or SIMPLE IRA must begin taking distributions at age 72, even if they’re still working, the IRS said.

“Account holders reaching age 72 in 2022 must take their first RMD by April 1, 2023, and the second RMD by Dec. 31, 2023, and each year thereafter,” the IRS states.

Retirement Plans

As to 401(k), 403(b) and 457(b) plans, profit-sharing and other defined contribution plans, and defined benefit plans, the first RMD must be taken by April 1 of the later of the year a participant reaches age 72, or the participant is no longer employed (if allowed by the plan), the IRS explains.

A 5% owner of the employer must begin taking RMDs at age 72.

RMDs may not be rolled over to another IRA or retirement plan, and Roth IRAs do not require distributions while the original owner is alive, according to the IRS.

RMD Calculations and 50% tax on missed distributions

An IRA trustee, or plan administrator, must either report the amount of the RMD to the IRA owner or offer to calculate it.

“An IRA owner, or trustee, must calculate the RMD separately for each IRA owned,” the IRS said. “They may be able to withdraw the total amount from one or more of the IRAs. However, RMDs from workplace retirement plans must be taken separately from each plan.”

Not taking a required distribution, or not withdrawing enough, “could mean a 50% excise tax on the amount not distributed,” the IRS states. RMD worksheets can be used to calculate the RMD and payout periods.

Inherited IRAs

An RMD may be required for an IRA, retirement plan account or Roth IRA inherited from the original owner.

For information on taking RMDs from an inherited IRA or retirement account and reporting taxable distributions as part of gross income, the IRS points to the Retirement Topics – Beneficiary page.

The IRS also points to Publication 559, Survivors, Executors and Administrators, “which can help those in charge of the estate complete and file federal income tax returns, and explains their responsibility to pay any taxes due on behalf of the decedent or person who has died,” the IRS said.

2020 Coronavirus-Related Distribution

“Since 2020 RMDs were waived, an account owner or beneficiary who received an RMD in 2020 had the option of returning it to their IRA or other qualified plan to avoid paying taxes on that distribution,” the IRS states.

A 2020 RMD that qualified as a coronavirus-related distribution “may be repaid over a 3-year period or have the taxes due on the distribution spread over three years,” the IRS relayed.

A 2020 withdrawal from an inherited IRA, meanwhile, “could not be repaid to the inherited IRA but may be spread over three years for income inclusion,” the IRS said.

(Image: Chris Nicholls)


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