Required Minimum Distribution
Taxpayers generally have to start taking withdrawals from their IRA, SEP IRA, SIMPLE IRA, or retirement plan account(s) when reaching age 72 (70 ½ if you were born before July 1, 1949). These withdrawals, called required minimum distributions (RMDs), are the minimum amounts you must withdraw from your account each year. After the first RMD, subsequent withdrawals generally must be taken by December 31.
So, generally, if you were born before July 1, 1949, you have an RMD due by December 31, 2021. For taxpayers who were born on or after July 1, 1949, your first RMD will be due on April 1, 2022, as the SECURE Act changed the required beginning date.
Note: Roth IRAs do not require withdrawals until after the death of the owner.
What is the deadline for taking subsequent RMDs after the first RMD?
|After the first RMD, you must take subsequent RMDs by December 31 of each year beginning with the calendar year containing your required beginning date.|
Example: You turn 70½ on July 15, 2019. Your first RMD, for 2019, would have been required to be taken by April 1, 2020. You must take your RMD for 2021, by December 31, 2021.
So, if you turned 70½ on July 15, 2019, your 2021 RMD needs to be completed by December 31, 2021, so you don’t incur an excise tax charge.
For failing to take the required minimum distribution, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed. In some cases, this excise tax total can create a significant amount to be paid.
If you are not sure if you fall into this category, you should contact your financial advisor or a tax accountant right away. You can also check the IRS.gov pages listed below for more information.
The IRS covers the rules, including ages, deadlines and requirements by plan on their site. See the pages listed below for more information: