Traditional IRA RMD Update
Several changes concerning IRA RMD’s (Required Minimum Distributions) have taken effect January 1, 2023.
- The RMD age has been raised to age 73. IRA owners who turn 72 in 2023 (those born in 1951) do not need to start taking their RMD until 2024 when they attain age 73.
- An IRA owner who fails to timely distribute an RMD (Required Minimum Distribution) is subject to an IRS excess accumulated penalty tax. Previously the excess accumulated penalty tax was 50 percent of the RMD amount that was not taken.
- Beginning in tax year 2023, the penalty tax will be reduced from 50 percent to 25 percent. If a failure to take the RMD is corrected in a timely manner, the penalty tax will be reduced from 25 percent to 10 percent.
For questions on the penalty tax please seek the advise of a tax professional.
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