In late December 2022, the SECURE Act 2.0 raised the required distribution age from 72 to 73 effective January 2023. What they didn’t mention was that it really would not affect any IRA owners until 2024. Interpretation of the start date and Required Beginning Date (RBD) was all over the place. Many owners turning 72 in 2023 received an RMD Notice in January 2023 in error saying they had to take an RMD. Some of them took one and now they want to put it back. Can they?
In addition, the IRS released the original SECURE Act in 2020 taking away the ‘stretch payout’ for most non-spouse beneficiaries. They inadvertently left out the part where beneficiaries of owners who were in RMD had to continue payments “At Least as Rapidly” (ALAR rule) as the deceased owner or over their own single life expectancy. This gave the indication that every beneficiary would have optional payments in the first 9 years and then closed by 12/31 of the 10th year after death. They tried to rectify this by releasing the Proposed Regulations in February 2022 as a “fix” to the situation which was expected to take effect for 2022 death distributions. They decided to postpone that implementation in October 2022 with IRS Notice 2022-53 and then again in July 2023 with IRS Notice 2023-54.
What You’ll Learn
- What happens if the bank sent out an RMD Notice to those turning 72 this year and an RMD was taken in error?
- What are the actual ages to start RMDs now and what does the Required Beginning Date mean?
- What does the term ‘mischaracterized RMD’ really mean?
- What is the deadline for putting the RMD back in the IRA and what is the process?
- Does a non-spouse beneficiary have mandatory annual RMD death distributions in the first 9 years after the IRA owner dies?
- What will happen when and if the IRS finalizes the Proposed Regulations?”
Who Should Attend
Any employee and customer service rep who answers customer questions on IRAs and is not familiar with the new IRS Notice 2023-54 and its interpretation should attend this focused, informational session on the details and procedural changes for this latest IRS Notice effecting IRA distributions.