IRS Delays RMDs Again for Some Inherited IRA Account Holders

RMD Required Minimum Distributions

On April 16, 2024, the IRS released “Notice 2024-35” extending the temporary relief from required minimum distributions (RMDs) for certain inherited retirement account holders.

Effectively, this means people that inherited an IRA on or after January 1, 2020 do not need to take an RMD in 2024. Prior to 2024, the IRS had waived RMDs for post-2020 inherited IRAs for each of the last three years.

This notice comes in relation to the passing of the SECURE Act in 2019 which requires certain beneficiaries to potentially take annual required distributions and empty inherited accounts by the end of the tenth year after the original account holder’s death. Prior to 2020, beneficiaries were eligible to extend their required minimum distributions over their own lifetime, easing the overall tax liability year-to-year.

However, there are strong indications from the IRS that the long-awaited permanent rulings regarding minimum distributions will be published soon. The Department of the Treasury and IRS have stated that they intend to issue the final regulations for RMDs, and any related penalties for failing to meet the permanent rulings, for 2025 and beyond. Given the statement made by the IRS and Treasury Department, it appears that final rules will be available by the end of 2024.

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