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Is There a Tax Penalty For Missing The RMD Deadline? What To Do (2023)

What To Do If You Missed The Required Minimum Distribution Deadline

If you have failed to take your Required Minimum Distribution (RMD) from your retirement account by the deadline, you may be wondering if there is a late payment penalty. The answer is yes – if you miss the RMD deadline, you are subject to a 50 percent penalty tax liability.

So yes, there IS a late payment penalty for missing the RMD deadline. And it is substantial.

Introduction – RMD Deadline & Tax Penalty

There are a few different options available to you if you have missed the RMD deadline.

  • First, you can contact the IRS and your IRA custodian to try and rectify the situation.
  • You may also be able to get the IRS to waive the late payment penalty if you have a reasonable excuse for missing the deadline.
  • The best course of action will vary depending on your individual circumstances.
  • However, if you have missed the RMD deadline, it is important to take action as soon as possible to avoid any further penalties.

This article will cover your options, including contacting the IRS and your IRA custodian. I will also show you how you may be able to get the IRS to waive the excess accumulation penalty, if you missed the RMD deadline.

Ready to get started?

Feel free to skip directly to the area you are most interested, by clicking on the topic in the table of contents

A report by the Treasury’s Inspector General estimated that more than 250,000 individuals failed to take required minimum distributions valued at $348 million….”


In all of my years as a Financial Planner and a Financial Coach, I can’t think of one instance where someone INTENTIONALLY missed the RMD deadline. With stiff 50% excise tax penalties, it is very important to understand what the deadlines for RMDs are. So that you can avoid this mistake as well. But knowing you are not alone in making this common mistake is comforting.

What Is The RMD Deadline? Time to Request Income From Tax-Deferred Accounts

The deadline for taking an RMD is April 1st of the year following the year in which the account holder turns age 72.  We will get into a bit more detail about the RMD for a 72 year old in 2023…

Ummmm, Michael, your wrong. I’ve always heard the age required beginning date is 70 1/2. Well, you are right. You did always hear age 70 1/2. But as stated earlier, the passing of the SECURE Act has moved the beginning date of RMDs to 72. And the IRS distribution rules for RMDs are quite strict. So it is important to understand them and mark your calendar.

  • If an account holder turns 72 in 2023, they would have to take their first RMD by April 1, 2024. That is called his Required Beginning Date RBD.
  • After the first RMD, account holders must take their RMD by December 31st of each subsequent year.

For example

  • Tom turns 72 October 15th, 2024
  • His Required Beginning Date RBD would be April 1, 2024
  • Tom can choose to take his first RMD distribution anytime between his 72nd birthday and April 1, 2024
  • Tom would then have to take a second RMD by December 31, 2024 – and by December 31 of each subsequent year as well.

Some people choose to take their first two separate distributions in the year after they turn 72.  Others choose to take one distribution over the two years to minimize the tax consequences and tax bracket.

Penalty Tax, Late-Payment Penalty

If you have ever missed the deadline, you could face penalties as high as a 50% excise tax. The 50 percent penalty applies to the amount that should have been withdrawn, not the amount actually withdrawn. These penalties will accumulate year after year until you catch the mistake.  The key is to catch it before it happens so that penalties won’t add up. 

Here are the steps to follow to avoid a missed RMD. Once you’ve spotted a mistake, make sure to take the appropriate action before the deadline.

For Inherited IRA’s – you can learn more from these two articles:

Inherited IRA New Tables

Inherited IRA RMDs

New RMD Tables

What Are The Penalties For Missing The RMD Deadline?

So far we have discussed what an RMD is, when you need to start taking them, and the deadline to take your RMDs as well.  So, what happens if I miss the RMD deadline?

You might be wondering, “Is there a late filing penalty for not taking an IRA distribution by the deadline?” The answer is yes.  

If you miss the deadline for taking your required minimum distribution RMD, you will be subject to a 50% excise tax on the difference of the amount that should have been withdrawn. I briefly touched on this earlier.

For example

If your RMD is $10,000 and you fail to take it, you will owe $5,000 in penalties/taxes. In addition, the IRS may assess other penalties, such as interest charges, if you don’t file your taxes on time.


Example 1

  • Suppose your required minimum distribution was $10,000
  • You completely forgot to take your withdrawal for the year, so you withdrew $0
  • Your required minimum distribution penalty for missing the RMD deadline would be

$10,000 Should have removed

– $       0 Amount you removed


$10,000 Penalty based on

X         50 percent RMD Penalty


$5,000 RMD Penalty amount that you owe for missing the RMD deadline

Example 2

  • Suppose your required minimum distribution was $10,000
  • You remembered to take your withdrawal for the year, but only withdrew $3,000
  • Your required minimum distribution penalty would be

$10,000 Should have removed

– $3,000 Amount you removed


$7,000 additional penalty based on

X   50% RMD Penalty


$3,500 RMD excess accumulation penalty amount that you owe

Example 3

  • Suppose your required minimum distribution was $10,000
  • You remembered to take your withdrawal for the year, and request $10,000
  • There was a mistake at your financial institutions, and they didn’t send you the RMD until January 15th – after the December 31st deadline.
  • Your required minimum distribution penalty would be

$10,000 Should have removed

– $    0 Removed by 12/31


$10,000 Penalty based on

X      50% RMD Penalty


$       0 RMD Penalty amount that you owe for missing the RMD deadline

How could that be???

Here are some further examples from Retirement Industry Trust Association as well

Corrective Action: Exceptions To The Penalties For Missing The RMD Deadline?

There ARE a few exceptions to the penalties for missing the RMD deadline.

Do you remember my three penalty examples just above?  In the third example – the brokerage made a mistake and sent you the RMD AFTER the December 31st deadline?  And the applicable tax penalty was $0?

If you can prove that the failure to take the RMD was due to reasonable cause, you may be able to avoid the 50% excise tax for missing the RMD deadline. But it is vital that you withdraw your RMD ASAP for your IRA as soon as you realize the mistake.

Additionally, if you are within 60 days of the RMD deadline, you may be able to take the RMD without penalty (missed RMD penalty relief) if you can show that the failure was due to a reasonable mistake.

There Are a Few Exceptions To The RMD Rule:

  • If the account holder is still working and does not own more than 5% of the company they work for, they can delay taking their RMD until April 1st of the year after they retire.
    • This only applies to the 401k at their current employer sponsored retirement account – not other 401ks or IRA’s
  • Another exception is if the account holder is a beneficiary of a deceased person’s retirement account.
  • In this case, the account holder can delay taking their RMD until December 31st of the year the deceased person would have turned 72.

Withdrawal requests from a retirement account are taxed as ordinary income. The RMD rule is designed to prevent people from using their retirement accounts as a way to avoid paying taxes on their savings indefinitely. By requiring account holders to take withdrawals starting at age 72, the IRS ensures that people will pay taxes on their retirement account earnings eventually.

There are a few different ways to calculate an RMD. The most common method is to use the life expectancy factor.

See my previous article about Life Expectancy Tables

Complete Tax Form 5329s To Report Missing RMDs

If you have missed the RMD deadline, you should contact the IRS Taxpayer Advocate Office ASAP. The IRS may forgive you if you explain why the RMD deadline was missed and what steps you took to fix the problem.  Ideally, you should take your late RMD before submitting your exemption or waiver request.

Do I Need To File Form 5329?

  • If you have missed an RMD due to an error, you must file a single Form 5329 with the IRS.  Report your non-compliance on Tax Form 5329, and attach a statement explaining why you missed the RMD deadline.  You should also attach a statement of reasonable cause or proof of a shortfall distribution.
  • The IRS will typically waive the penalty if the mistake is your fault AND you have taken reasonable and timely steps to correct the error.
  • IRS Correcting RMD distribution failures
  • How To Correctly Complete Form 5329? First, it is very important you take a look at the instruction here: Actual Form 5329 Instructions

Here are some high level overview steps to completing form 5329. Instructions for Form 5329

  • Line 52: Enter the correct RMDs that the owner of the retirement account was required to take.
  • Line 53: $0 if no distributions were made. Or the amount of RMDs taken from the account.
  • Line 54: *Be careful on this line – most errors happen here. When requesting a waiver from the 50% applicable tax penalty, consider putting $0, write in reasonable cause, followed by the shortfall. It appears to contradict the instructions – but this is how a CPA once explained it to me. I defer to the experts for taxes, which I am not.
  • Line 55: $0, assuming the IRS will grant the missed RMD penalty relief request. Since you corrected the error by taking the RMD eventually.
  • The standalone Form 5329 is not the only thing you should send to the IRS. You should also include a letter of explanation. The letter should be brief, but explain the year(s) the RMD was missed, how much of a shortfall there was, what corrective actions you took – and why the error happened in the first place.
  • If caught early enough, you can include the form 5329 with your 1040 income tax return for the year.

What If I Have Missed The RMD Deadline For Multiple Years?

  • You can put many missed distributions on a single form if they all happened in the same year.
  • If you missed distributions in more than one year, you must file a new form for each year.
  • In addition, married couples who both miss a distribution must complete separate forms.
  • Because the form is difficult to fill out, pay great attention to the directions. Instructions for Form 5329
  • You should also send a letter explaining why you missed the distribution and alerting the IRS that you have now made the right distributions, in addition to completing Form 5329.

  • The IRS will send you a notice if it does not waive the applicable tax penalties.

However, in some cases, additional IRS Form 5329s are required.

  • If a married couple misses an RMD from their individual IRAs in the same year, they must each file a Form 5329 to obtain relief for that year.
  • Even if the taxpayer files a combined return, Form 5329 is only applicable to the individual taxpayer.
  • Furthermore, if a taxpayer fails to make RMD payments in multiple years, a separate Form 5329 should be filed for each year in which an RMD shortfall occurred, using the appropriate Form 5329 for that year.


There is NO statute of limitations for Missed RMD withdrawals

Let me repeat this. Because even expert tax advisors are often falsely under the impression there is a 3 year statute of limitations. There is NO statute of limitations for Missed RMD withdrawals

Don’t take my word for it. I am not, and have never been, a tax advisor. So don’t take professional tax advice from me. Take it from the Supreme Court though…

Summary: What is a Required Minimum Distribution or RMDs

If you’re considering retirement or currently retired, you’ve probably heard of RMDs. RMDs stands for required minimum distributions, but many don’t know exactly what RMDs are. This type of distribution is mandatory for people over 72 (new SECURE ACT RMD rules), and must be taken by December 31 each year. 

A required minimum distribution is a minimum amount that a retirement account owner must withdraw from theirtax-deferred retirement account each year. The RMD is calculated based on the entire account balance and the account holder’s life expectancy using the life expectancy factor. 

So why do we need to take RMDs? The RMD rule was designed to prevent people from deferring taxes on income indefinitely. You had saved for retirement through different types of retirement plan accounts and tax deferred retirement accounts. The IRS wants you to eventually pay additional taxes – so they require you to begin to withdraw from your retirement accounts eventually. Withdrawals from IRAs are taxed as ordinary taxable income (see my in depth article for more on that)

Taking your required minimum distribution (RMD) is not that complicated, but it is important to take the proper amount of money each year.  And in sufficient time before the RMD deadline. Here is a recent article I wrote on how to calculate your RMDs.

You can find more information at

fidelity.com/rmd or schwab rmd calculator

publication 590-b 2023 tables for 2023

Recent Changes to the RMDS

The SECURE Act was originally passed in 2019 and made changes to the Required Minimum Distribution RMD rules for different types of retirement plan accounts. The most significant change was to the start date for RMDs, which was pushed back from age 70 ½ to age 72.  This was part of the Individual Retirement Account update, RMD law and rules.

This change applies to anyone who turned 70 ½ after December 31, 2019. 

The other major change was to eliminate the “stretch” provision, which allowed non-spouse beneficiaries to take distributions over their lifetime. Under the new rules, assets to beneficiaries must take all distributions within 10 years of the account holder’s death. Be sure to speak with your financial advisor and tax professional about the five year rule and ten year rules.

  • However, it is important to note that the changes do not apply to inherited IRAs from prior to 2019 – the old rules still apply to those accounts.

If you are subject to the RMD rules, it is important to understand how they work and how the changes may affect you. If you have any questions, please consult a tax and financial advisor.


So if you have missed an RMD, especially for multiple years, you want to correct it ASAP!!! Because if and when the IRS discovers the missed RMDs – they can hit you with the 50% excise tax, failure to file penalties, failure to pay penalties, and interest, etc. It could get ugly.

RMD errors are among the most common missteps made by retirement plan owners and spousal and non-spouse beneficiaries. While 50% is a severe penalty, mitigation (i.e., the IRS granting a relief waiver) is possible if the appropriate steps are taken. The IRS is typically lenient with good-faith RMD faults that are quickly addressed when discovered when done appropriately. Work with your tax and financial advisor to get this fixed ASAP.


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Michael Ryan
Michael Ryanhttps://michaelryanmoney.com/
A former stockbroker, financial planner, and owner of my own financial planning practice and then a property & casualty agency. I have since retired and decided I want to help individuals and business owners by offering personal financial coaching. And now, I have started my blog - www.michaelryanmoney.com - to bring financial literacy to everyone. In a short time I have already been quoted and featured in US News & World Report, Business Insider, Yahoo Finance, and more (https://michaelryanmoney.com/home/press/) As a financial planner, I helped people from all walks of life. If you have questions about money, I will help you find the answers at www.MichaelRyanMoney.com
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