Articles | Jan 31, 2025

New IRS Regulations on Year-of-Death RMDs

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Written By: Madeline J. Drechsel

On July 19, 2024, the IRS released final regulations on year-of-death required minimum distributions (RMD).

Previously, if an individual retirement account (IRA) owner who has reached the required beginning date died before satisfying his or her annual RMD, the IRA beneficiary was responsible for taking the remaining RMD amount by December 31 in the year of the owner’s death. Failure to meet this deadline could result in an excise tax of up to 25%.

Under the new regulations—which apply to RMDs beginning on or after January 1, 2025—if a beneficiary fails to satisfy the RMD in the year of the IRA owner’s death, there is an automatic waiver of the excise tax. This waiver only applies in the case of an IRA owner who had an RMD due in a calendar year and died in that calendar year before satisfying the RMD.

The deadline to take the missed RMD and be eligible for the automatic waiver is now the later of (1) the tax filing deadline for the taxable year of the beneficiary that begins with or within the calendar year in which the IRA owner died, or (2) the end of the following calendar year. For most traditional IRA beneficiaries, this means the year of death RMD deadline is now December 31 of the year after the IRA owner’s year of death.

If you have any questions, please contact a member of our Trusts and Estates Practice Team or the Phillips Lytle attorney with whom you have a relationship.

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