IRS postpones RMDs from IRAs inherited since 2020.
by G.K.Chesterton (2024-04-17 17:16:08)
Post Reply Return to Back Room

Amazing how unready the IRS is on this item - they keep delaying. One wonders if there are political reasons to delay this until after the election but I won't complain for now.

Many Americans who inherited retirement accounts since 2020 won’t be required to start pulling money out this year after the Internal Revenue Service said it was further postponing enforcement of a law passed in 2019.

Part of the law required most inheritors other than spouses to empty IRAs within 10 years, not over their lifetimes, as was previously allowed. Many heirs interpreted this to mean that they could hold off pulling money out until year 10, allowing them to time their withdrawals to lower their taxes while the balances continued to grow.

Then, in February 2022, the IRS proposed rules mandating annual withdrawals for these inheritors during that 10-year period, if the original account owner had already been taking distributions.

After complaints from taxpayers and financial-services companies over how to follow the new rules, the IRS said it wouldn’t impose penalties for missing required minimum distributions, or RMDs, until the details could be finalized, essentially allowing these inheritors to skip taking money out. That reprieve has now been extended through 2024.

The penalty for failing to take required IRA payouts is assessed at 25% of the amount that should have been taken out.



good to know but I'll continue my withdrawals anyway *
by discNDav  (2024-04-18 05:59:13)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Reply to Post