The Internal Revenue Service (IRS) has announced a one-year delay for the earliest potential effective date of specific proposed rules regarding required minimum distribution (RMD) requirements. The new effective date is now 2026 instead of the initial 2025 distribution calendar year set. RMD requirements mandate the timing for participants and beneficiaries to receive distributions from tax-deferred retirement accounts each year to avoid tax penalties.
In July 2024, the IRS issued a Final Rule that included changes proposed in February 2022 and additional modifications enacted in December 2022 through SECURE 2.0.
The delay pertains only to provisions included in the Proposed Rule for 2024 and does not impact the existing requirements in the Final Rule.
Irs delays RMD rule changes
The affected sections of the 2024 Proposed Rule include:
- Section 1.401(a)(9)-4: Proposed rules regarding the successor beneficiary of a surviving spouse.
- Section 1.401(a)(9)-5: Proposed rules for defined contribution plans, which include the spousal election to have RMDs determined using the Uniform Lifetime Table, treatment of distributions from Roth contribution accounts, and corrective distributions and the excise tax on RMD failures.
- Section 1.401(a)(9)-6: Proposed rules addressing the exception to the qualified domestic relations order requirements for qualified longevity annuity contracts.
- Looking ahead, the finalization of the 2024 Proposed Rule could further delay its effective date beyond the 2026 distribution calendar year.
In the interim, plan sponsors must adhere to a reasonable, good-faith interpretation of the statute.
