The Internal Revenue Service has once again extended the effective date of the proposed required minimum distribution regulations issued under Secure 2.0 — this time to at least Jan. 1, 2027.
"Retirement plans and IRAs are already required to comply with most of the RMD regulations stemming from the Secure and Secure 2.0 Acts (enacted in 2019 and 2022, respectively)," Mark Iwry, a former senior advisor to the Treasury secretary on retirement policy who's now a nonresident senior fellow at the Brookings Institution in Washington, said Monday in an email.
The IRS issued RMD regulations in July 2024. Most of the regs were final — such as annual RMDs "for certain beneficiaries subject to the 10-year payout; extending the deadline for year-of-death RMDs; and more generous RMDs for certain trusts named as IRA beneficiaries," according to IRA expert Ed Slott. Others were still at the proposal stage.
The key proposed regs at issue in the new IRS notice, Announcement 2026-7, concern Section 327 of the Secure 2.0 Act, which created a new option intended to benefit younger surviving spouses.
"A surviving spouse who inherits their deceased spouse's IRA can continue that inherited IRA (not roll it over) and gain some new benefits," Greenleaf Trust explains. "Section 327 allows a surviving spouse to elect to be treated as the deceased employee for purposes of the required minimum distribution (RMD) rules."
The proposed regs were originally supposed to become final on Jan. 1, 2025. However, the IRS previously delayed that effective date until Jan. 1, 2026.
Announcement 2026-7, issued Monday, delays further "the deadline for retirement plans and IRAs to comply with certain RMD regulation provisions that have yet to be issued in final form," Iwry added.
The IRS notice states that "the previously delayed parts of the proposed regulations will not be effective until calendar years that begin at least 6 months after final regulations are issued," the American Benefits Council added in another email. "So, if the final regulations are not issued by June 30, 2026, they won't be effective in 2027. The reasonable good-faith standard will continue to apply prior to the effective date."
For advisors, the delay "changes nothing — just keep following the RMD rules we have now, the same as they have been doing," Slott said.
"As usual, the IRS says that in the interim, plans and IRA custodians can apply their own interpretation of the tax code (rather than the IRS' interpretation as set forth in the proposed regs) — as long as it is reasonable," Slott added. "Practically, plans and custodians are simply relying on the proposed regs until they are finalized."
Aspects of the proposed regs that are delayed, according to the American Benefits Council, relate to:
- distributions to beneficiaries after the death of the participant and the participant's spouse;
- the treatment of the spouse as the employee for certain purposes;
- the valuation of annuities under the new partial annuitization rule;
- the treatment of distributions from in-plan Roth accounts;
- corrective distributions and the excise tax on RMD failures; and
- when a divorce or separation agreement may be used in lieu of a qualified domestic relations order for purposes of the new qualifying longevity annuity contract (QLAC) rules.
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