01/19/2026
IRA Minimum Distribution
Upon attainment of age 73, individuals that own a traditional, traditional simplified employee pension (SEP), or traditional Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA must begin taking RMDs from their IRA(s). These traditional ‘type’ IRA owners have until April 1 of the year after their age 73 year to take their first RMD. This date is referred to as the required beginning date (RBD). The deadline for an IRA owner to satisfy his/her RMD(s) for each subsequent year is December 31. Additionally, a beneficiary of a decedent’s IRA may either be subject to an annual RMD for a life expectancy period and must remove the RMD amount by the end of each year or must take the inherited IRA balance by the end of a five-year period or 10-year period. Certain other scenarios also require an annual RMD during the 10-year period.
If an RMD amount is not withdrawn by the applicable deadline an ‘additional tax on excess accumulation’ applies. For 2023 and subsequent year RMDs, IRA owners and IRA beneficiaries are subject to a 25% additional tax on the RMD amount not taken, with the potential to have the tax reduced or waived entirely. With respect to a possible reduction of the 25% additional tax, if an IRA owner (or beneficiary) withdraws the RMD amount during the correction window defined in the Instructions for Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, (i.e., generally within two years after the RMD deadline) the 25% additional tax is reduced to 10 percent. If the deadline to satisfy an RMD was missed due to reasonable cause, an IRA owner (or beneficiary), with the aid of a tax professional, may ask the Internal Revenue Service (IRS) to waive the additional tax entirely. When requesting a waiver of the additional tax on an excess accumulation it is prudent for an IRA owner (or beneficiary) to withdraw the RMD amount as soon as he/she realizes it was not taken timely. An IRA owner (or beneficiary) may request a waiver of the additional tax by providing a ‘statement of explanation’ to the IRS indicating why the RMD amount was not taken by the deadline, and the fact that he/she has remedied the “shortfall” by removing the RMD amount after the deadline. The statement of explanation is attached to IRS Form 5329 without payment of the additional tax. An IRA owner (or beneficiary) waits for a reply from the IRS indicating whether an additional tax is due. The IRS will send a letter of what further action if any needs to be taken. The IRS will NEVER call you.
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