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Retirement Planning > Spending in Retirement > Required Minimum Distributions

IRS Reminds Taxpayers of April 1 RMD Deadline

By Melanie Waddell

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The Internal Revenue Service Thursday reminded retirees who turned 72 during 2022 that, in most cases, April 1, 2023, is the last day to begin receiving required minimum distribution payments from IRAs, 401(k)s and similar workplace retirement plans.

RMDs are normally made by the end of the year, the IRS said.

The April 1 RMD deadline only applies to the required distribution for the first year, the IRS explained. For all later years, the RMD must be made by Dec. 31.

“Anyone who reached age 72 during 2022 is covered by a special rule that allows IRA account owners and participants in workplace retirement plans to wait until as late as April 1, 2023, to take their first RMD,” the IRS said.

“In other words, in general, the special April 1 rule applies to IRA owners and other participants in these plans who were born after Dec. 31,1949.”

The IRS advised taxpayers that for or a 2022 RMD (due April 1, 2023), “use the life expectancy tables in Appendix B of the Publication 590-B.”

As shown in Table III, the RMD for a person age 72 in 2022 will normally be based on a distribution period of 27.4 years, the IRS said.

“Divide the Dec. 31, 2021, balance by 27.4 to get the RMD for 2022. Pub. 590-B has worksheets, examples and other information that can help anyone figure their RMD,” the agency said.

The IRS explained: “Taxpayers who receive their first required distribution (for 2022) in 2023, on or before April 1, must receive their second RMD (for 2023) by Dec. 31, 2023. Even though the first distribution is actually the required 2022 distribution, it’s taxable in 2023 and reported on the 2023 tax return — along with the regular 2023 distribution.”

For those planning ahead, “starting in 2023 retirees can wait until age 73 to begin receiving RMDs,” the IRS said.

Required distribution rules apply to owners of traditional, SEP and SIMPLE IRAs while the original owner is alive.

“They also apply to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans. RMDs don’t apply to Roth IRAs,” the IRS explained.

While the April 1 deadline is mandatory for all owners of traditional IRAs and most participants in workplace retirement plans, some people with workplace plans can wait longer to receive their RMD, the IRS said.

“Most participants who are still working for that employer can wait until April 1 of the year after they retire to start receiving these distributions, if their workplace plan allows,” the IRS said.

“This RMD exception does not apply to 5% owners of the business sponsoring the retirement plan or to participants in SEP and SIMPLE IRA plans.

Employees of public schools and certain tax-exempt organizations with 403(b) plan accruals before 1987 should check with their employer, plan administrator or provider to see how to treat these accruals, the agency said.

Melanie Waddell

@Think_MelanieW

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