If you missed an RMD deadline, the old 50% penalty is no longer the current federal rule. The IRS RMD FAQs explain that the excise tax on the RMD shortfall is generally 25%, and it can drop to 10% when the shortfall is corrected within the statutory correction window and the required tax return is submitted. The IRS may also waive part or all of the tax when the shortfall was due to reasonable error and you are taking reasonable steps to fix it.
The part that trips people up is that these are three separate jobs: fix the missing distribution, determine whether the 10% reduced rate applies, and decide whether to request a reasonable-cause waiver on Form 5329. I saw the panic a missed RMD could create as a planner. The fastest way out is not to improvise a tax strategy. It is to work the correction in the right order.
Quick Answer
If you missed an RMD or took less than required, first verify that an RMD was actually due and calculate the shortfall. Then take the corrective distribution as soon as practical and use the Form 5329 instructions for the tax year in which the RMD was due. The additional tax is generally 25% of the shortfall, with a 10% rate potentially available for a timely correction. A reasonable-cause waiver is a separate request: the IRS decides whether to waive the tax.
Key Takeaways Ahead
Missed an RMD? Start With These 3 Checks
Before you file anything or send the IRS a check, make sure you are correcting the right problem. A surprising amount of missed-RMD confusion starts one step too late.
1. Confirm That an RMD Was Actually Due
Traditional IRAs and most employer retirement plans are subject to RMD rules once the applicable starting rules are met. Original owners of Roth IRAs do not have lifetime RMDs. Inherited accounts follow a different set of beneficiary rules, and certain inherited-IRA RMDs received temporary IRS penalty relief for earlier years.
If the missed distribution involves an inherited account, stop before assuming a penalty applies. My inherited IRA RMD rules guide owns that beneficiary-specific question.
2. Identify the Deadline You Actually Missed
Under the IRS RMD deadline guidance, an IRA owner taking a first RMD at age 73 can generally delay that first distribution until April 1 of the following year. After that, RMDs are generally due by December 31 each year. Delaying the first RMD does not erase the next one; it can put two required distributions in the same calendar year.
Employer-plan timing can differ, including the still-working rule for some plan participants. The point here is not to re-teach every RMD starting rule. It is to establish the exact tax year in which the shortfall occurred, because that controls the Form 5329 you need.
3. Calculate the RMD Shortfall, Not Just the Full RMD
The excise tax applies to the amount that should have been distributed but was not. If your RMD was $20,000 and you took $15,000 by the deadline, the shortfall is $5,000.
If you need to reconstruct the required amount, use the current IRA RMD calculator as an estimate and verify the result against your custodian records and the applicable IRS table. This page is about fixing the miss, not rebuilding the calculation rules from scratch.
Missed-RMD Penalty Rules at a Glance
| Question | Current federal rule | What to do |
|---|---|---|
| What is the standard excise-tax rate? | Generally 25% of the RMD shortfall. | Calculate the undistributed amount for the year the RMD was due. |
| Can the rate drop to 10%? | Potentially, if the shortfall is corrected during the statutory correction window and a return reflecting the additional tax is submitted. | Correct promptly and follow the Form 5329 instructions for that tax year. |
| Can the tax be waived? | The IRS may waive part or all of it for reasonable error when reasonable steps are being taken to remedy the shortfall. | Request relief on Form 5329 and attach an explanation that states the actual facts. |
| How long is the correction window? | It ends on the earliest of an IRS deficiency notice, assessment of the tax, or the last day of the second taxable year beginning after the year the tax was imposed. | Do not treat “two years” as permission to wait. |
How to Fix a Missed RMD in 3 Steps
Step 1: Correct the RMD Shortfall
Once you confirm that an RMD was due and determine the shortfall, correct the missing distribution as soon as practical. Prompt correction matters for two reasons: it can be necessary for the 10% reduced tax rate, and it supports a reasonable-cause request by showing that you took steps to fix the error after discovering it.
Keep the calculation, account statement, distribution confirmation, and the date you discovered the error. If more than one IRA is involved, remember that IRA RMDs are calculated separately even though qualifying IRA RMD amounts can generally be aggregated for withdrawal purposes. Employer plans have different aggregation rules. My RMD aggregation guide covers that boundary.
Step 2: File Form 5329 for the Year the RMD Was Due
The IRS Instructions for Form 5329 use Part IX to report the additional tax on an RMD shortfall. Use the version of Form 5329 for the tax year in which the RMD should have been taken, even if you discover and correct the problem later.
Line numbers can change from one form year to another, so do not copy old blog instructions mechanically. On the 2025 Form 5329 instructions, a reasonable-cause waiver request is reflected by entering “RC” and the amount you want waived on the dotted line next to line 54a or 54b, then completing line 55 for any remaining additional tax. Do not put “RC” next to line 55 when the instructions for the tax year direct the waiver request to line 54a or 54b; use the form and instructions for the year of the missed RMD.
Do Not Mix Up the 10% Rate and a Waiver
The 10% reduced rate and a reasonable-cause waiver are different forms of relief. The 10% rule is tied to a timely correction within the statutory correction window. A waiver asks the IRS to forgive part or all of the tax because the shortfall resulted from reasonable error and you took reasonable steps to remedy it. Do not assume that correcting the distribution automatically means the tax is waived.
Step 3: Make the Reasonable-Cause Explanation Factual
If you request a waiver, attach the explanation the Form 5329 instructions require. Reasonable cause is not a magic phrase and there is no universal letter that guarantees approval. The IRS decides relief based on the facts.
A useful explanation answers four questions plainly: What caused the shortfall? When did you discover it? What did you do to correct it? What changed so it is less likely to happen again? That is stronger than copying a dramatic template or claiming a reason that is not true.
Example Reasonable-Cause Wording
“I failed to take the full required minimum distribution for the tax year reported on this Form 5329 because of a reasonable error. After discovering the shortfall, I took the corrective distribution and reviewed my annual RMD process so the error would not be repeated. I respectfully request a waiver of the additional tax under IRC section 4974.”
Use this only as a structure. Your statement should describe your actual facts, dates, correction, and preventive steps.
What Can Complicate a Missed-RMD Correction?
Inherited IRAs Can Have Different Penalty History
Inherited IRAs are the first place I would slow down. IRS transition relief covered certain missed annual beneficiary RMDs for 2021 through 2024 while the post-SECURE Act rules were being finalized. The final regulations are now in effect, so a 2025-or-later inherited-IRA miss should not be treated as though the old transition relief automatically continues.
If the account is inherited, verify the beneficiary rule and tax year before assuming Form 5329 tax is due. That is a separate reader job from ordinary owner RMDs, which is why the deeper mechanics belong on the inherited-IRA page.
A Catch-Up Distribution Is Taxed in the Year You Actually Receive It
Correcting last year’s missed RMD does not move the distribution back onto last year’s income-tax return. The distribution is generally reported in the year it is actually paid. That can affect taxable income and income-based calculations, but those consequences belong to the separate RMD tax and income-classification guide. Here, the practical point is simply to know which year reports the distribution and which year Form 5329 addresses the missed requirement.
An IRS Notice Changes the Correction Analysis
The correction window does not always mean you have two full years from today. Under the IRS rules in Publication 590-B, the window closes on the earliest of a deficiency notice, assessment of the tax, or the statutory two-taxable-year endpoint. If the IRS has already contacted you about the missed RMD, use the notice and tax year as controlling facts rather than relying on a generic timeline.
Missed-RMD Correction Checklist
- Confirm an RMD was actually due. Check account type, owner versus beneficiary status, and the applicable tax year.
- Calculate the shortfall. Use the amount that should have been distributed minus what was actually distributed by the deadline.
- Correct the distribution promptly. Keep the transaction confirmation and account records.
- Use the correct year’s Form 5329 and instructions. Do not assume today’s line numbers match the year you missed.
- Separate the 10% reduced rate from a reasonable-cause waiver. They have different requirements and should not be described as the same relief.
- Write a factual waiver explanation if requesting relief. Explain the error, discovery, correction, and prevention steps.
- Escalate when the facts are messy. Multiple missed years, inherited IRAs, employer plans, an existing IRS notice, or uncertainty over the RMD amount are good reasons to involve a tax professional.
It is tempting to treat a missed RMD like a tax-planning emergency with half a dozen side strategies. I think the cleaner rule is better: correct the compliance problem first. Once the distribution and Form 5329 are handled correctly, then deal with any separate income-tax consequences in the year the money was actually received.
