20 Mar 2023 Financial Institution Reporting for 2023 RMDs
Account holders who have IRAs and are turning 72 years old this year and have received RMD statements can disregard them. Financial institutions that are responsible for maintaining IRAs must inform their account holders about the required minimum distributions by January 31st of the year they are due. In the past, RMDs were due in the year that the IRA owner turned 72. However, the SECURE 2.0 Act has increased the starting age for RMDs to 73. Some banks were unable to adjust their systems in time for the new law and sent out statements to owners who are turning 72 this year. These institutions will not face penalties as long as they notify their account holders by April 28th that no RMD is necessary.
IRA Reporting
If you turned 72 years old last year and decided to delay your first IRA payout, you must take your RMD by April 1st of this year. The change in the RMD starting age only applies to those who turn 72 years old after 2022. To calculate your RMD, you should begin with your IRA balances as of December 31st, 2021, and divide each by the factor for your age, which can be found in Appendix B of IRS Publication 590-B.
Read the full article here.
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