Penalties for missed/short RMD’s

I know that there is a 50% penalty for not taking out enough RMD.

Is that 50% penalty every year until the person “catches up”? For example, if they let one ride for three years, would the penalty be 150%?



No, it’s a one time penalty. When it is not waived for “reasonable cause” as it often is, late interest can also be added to the 50% excise tax and this could amount to several year’s interest.  And if you self report the late RMD and request a penalty waiver, that means that you have two or more years of RMD income in the year you make up that RMD. That could inflate the tax rate for that year.



We have the form 5329 filled out.  Is there a place on the form that I am missing to ask for the penatly waiver or do you send in a letter with the reasons why it was not taken and ask for the waiver?Do you put the amount of what the penalty would be on line 55 or do you leave it out and put in there see letter asking for penalty waiver?thank you



A separate statement should be submitted explaining the “reasonable cause” for the delinquent RMD and indicating that the late RMDs have been distributed. Lines 54 and 55 of the form itself are confusing, as p 8 of the 5329 Inst state. The Inst. indicate that line 52 and 53 should be completed as instructed. Line 54 should show “RC” and the amount to be waived on the dotted line, but 0 on the actual line. Line 55 will then also be 0.



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