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Client Update: Retirees Who Turned 72 in 2022 Must Take RMD by April 1, 2023

On Behalf of | Mar 14, 2023 | Firm News

Most retirees who turned 72 in 2022 must take the first required minimum distribution (RMD) from their retirement account by April 1, 2023, according to the IRS. The minimum distribution requirement applies to Individual Retirement Arrangements (IRAs), 401(k)s, and similar workplace retirement plans. ( IR 2023-43 , 3/9/2023)

Note.  Taxpayers who have Roth IRAs don’t need to take RMDs from those accounts.

This April 1 deadline only applies to a taxpayer’s first RMD. All other RMDs must be made by December 31. This means that taxpayers who turned 72 in 2022 and are taking their first RMD in 2023, must take their second RMD on or before December 31, 2023.

Note.  In this case, both distributions are taxable in 2023 and reported on the taxpayer’s 2023 return.

Taxpayers taking a 2022 RMD by April 1, 2023, should use the life expectancy tables in Appendix B of IRS Publication 590-B to determine the minimum distribution they must take. Pub. 590-B has worksheets, examples and other information that can help anyone figure their RMD.

Delayed RMDs. Some taxpayers with workplace retirement plans can delay taking RMDs if they are still working for the employer that sponsored that plan. hese taxpayers, if their plan allows, can wait until April 1 of the year after they retire to start taking RMDs.

Note.  This RMD exception doesn’t apply to 5% owners of the business sponsoring the retirement plan or to participants in SEP and SIMPLE IRA plans. Also, there may be special rules for individuals who contributed to a 403(b) plan before 1987. These individuals should check with their employer, plan administrator or provider for information on how to treat those accruals.

New rule in 2023.  For those planning ahead, starting in 2023 retirees can wait until age 73 to begin taking RMDs.

For more information about the required minimum distribution rules, see Checkpoint’s Federal Tax Coordinator ¶H-8275.