IRS Clarifies SECURE Act RMD Penalty Application for 2021 and 2022

The IRS' SECURE Act regulations created confusion for taxpayers who inherited retirement accounts post-SECURE Act and were required to empty the account under the new 10-year rule. Under the proposed regulations, the IRS decided that if the account was inherited from someone who was already taking RMDs, the beneficiary was required to take an annual RMD during years one-nine after the account owner's death. Many taxpayers expected the IRS to decide otherwise, so failed to take RMDs for 2021 and 2022. Under the Notice 2022-53, the IRS offered relief and said that the otherwise applicable 50% penalty for missed RMDs would not apply to those beneficiaries for 2021 and 2022. The relief applies only to beneficiaries who inherited accounts and were subject to the 10-year rule in 2021 and 2022. For more information on the post-SECURE Act rules on inherited retirement accounts, visit Tax Facts Online. : Q 3902. Note: Q is updated.