This rewrite explains Required Minimum Distributions (RMDs), when they apply, and what to do if you miss a required distribution. It also updates the language for taxpayers filing 2026 tax returns in 2027.
What Is a Required Minimum Distribution (RMD)?
A Required Minimum Distribution (RMD) is the minimum amount that must be withdrawn each year from certain retirement accounts once you reach the age when distributions are required by law.
You can't keep money in a traditional IRA forever without eventually taking distributions. The IRS requires account owners to begin withdrawing funds and reporting those distributions as taxable income when applicable.
If you don't take your full RMD, or if you withdraw less than the required amount, you may owe an excise tax on the amount that should have been distributed.
What Happens If I Don't Take My RMD?
If your total distributions for the year are less than your required minimum distribution, the IRS may assess an excise tax on the shortfall.
Recent tax law changes have reduced the penalty in many cases, and taxpayers who correct the missed distribution promptly may qualify for a lower penalty. Because penalty rules can change, review the most current IRS guidance in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) when determining your filing requirements.
The date your RMD must begin depends on factors such as:
- The type of retirement account
- Your age
- Whether you inherited the account
- The applicable IRS rules for the account year
Are RMDs Required for Roth IRAs?
Generally, Roth IRA owners are not required to take lifetime RMDs from their own Roth IRAs.
However, different rules apply to inherited Roth IRAs. If you inherit a Roth IRA, you may be required to take minimum distributions depending on your relationship to the original owner and when the account owner passed away.
If the required distribution from an inherited Roth IRA is not taken, an excise tax may apply to the amount that should have been withdrawn.
Can the RMD Penalty Be Waived?
In some situations, the IRS may waive the penalty if:
- The missed distribution resulted from a reasonable error, and
- You have taken, or are taking, steps to correct the shortfall.
Examples of reasonable errors may include serious illness, incorrect information from a financial institution, or other circumstances beyond your control.
To request a waiver, complete Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, and include a statement explaining why the distribution was missed and how the error is being corrected.
The IRS will review your explanation and determine whether the penalty should be waived.
How to Enter Form 5329 in the Program
If you need to report a missed RMD or request a penalty waiver, navigate to:
- Federal
- Other Taxes
- Additional Taxes on Qualified Plans and Other Accounts
- Complete Section IX for the RMD penalty and waiver request information.
In most cases, Section IX is the only portion of this entry that must be completed for an RMD-related penalty issue.
Additional Tip
If you're approaching RMD age or have inherited a retirement account, it's a good idea to verify your required distribution amount with your financial institution before year-end. Taking the correct distribution on time can help you avoid penalties and unexpected tax issues when filing your return.