The Department of the Treasury and the Internal Revenue Service have issued final regulations updating the required minimum distribution rules. These final regulations, says the IRS, reflect changes made by the SECURE Act and the SECURE 2.0 Act impacting retirement plan participants, IRA owners and their beneficiaries.
The Treasury and IRS have also issued proposed regulations, addressing additional RMD issues under the SECURE 2.0 Act. If these become final in the future, we will explain them at that time.
In a statement, the IRS says that while certain changes were made in response to comments received on the proposed regulations issued in 2022, the final regulations generally follow those proposed regulations.
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Specifically, the Treasury and IRS reviewed comments suggesting that a beneficiary of an individual who has started required annual distributions should not be required to continue those annual distributions if the remaining account balance is fully distributed within 10 years of the individual’s death as required by the SECURE Act. However, the Treasury and IRS determined that the final regulations should retain the provision in the proposed regulations requiring such a beneficiary to continue receiving annual payments.
IRAs generally, and RMDs in particular, can be complex, and the penalties for mismanaging them can be severe. If you’re unsure about your status, contact a qualified professional.
