new inherited ira custodian won’t calculate rmd for non spouse
I inherited two 403B’s from my mother who died in 1993; I was in my forties at the time. The custodian calculated rhe rmd’s every year and I took them either via EFT to my checking account or transfer to a non qualified account with the same company. At tax time I received 1099R’s. The 1099R’s always showed the same rmd amounts.
in January of this year I liquidated these 403B’s and moved them to an inherited IRA. Before moving the money the old custodian calculated the rmd’s for 2025 and moved the money to the non qualified account, after taces were witheld. So I’m set up for 2025 tax preparation and should get 1099’s for these accounts.
My question is what happens in 2026.The new company does not calculate rmd’s for inherited ira’s. they require that I do this myself. Since I am under the pre Secure Act rules per the irs I plan to continue to take a small rmd from the new IRA. How does the IRS know that I don’t fall under the Secure Act rule and assess a penalty for under witholding?
Permalink Submitted by Alan - IRA critic on Fri, 2025-06-20 11:47
The IRS almost never checks beneficiary RMDs, but if they did you can easily produce documentation that shows you inherited the 403b prior to 2020. But if you are still concerned, you might check to see if your IRA custodian will title the inherited IRA showing the DOD of your mother, eg “Mary Smith, DSCD 4/12/1993”.
As for the calculation, your divisor should have been reset to the new RMD tables in 2022. Pull up the IRS single life table divisor for your age in 1994 and subtract 32.0 from that divisor to get your 2026 divisor. Then continue to reduce the divisor for 1.0 for each year after 2026.
I think your last question meant to address RMD shortfall rather than withholding, but with respect to withholding from the inherited IRA distribution, the default rate for an IRA is 10%, but you can increase it up to 99% if you want to. Or you can decline withholding altogether if you don’t need or want it.