RMD Age for Those Born in 1959
For many months, I have been under the impression that the RMD age for those born in 1959, as defined in Secure Act 2.0, is 73. However, I recently learned that the actual legislation was unclear for those born in that year and those born in 1959 fall into two categories for the RMD age: 73 AND 75. Now, it sounds like that the IRS plans to eventually publish guidance clarifying that the correct RMD age for those born in 1959 would be age 75 and not age 73. Has anyone heard this???
Permalink Submitted by Alan - IRA critic on Thu, 2023-08-10 20:24
Permalink Submitted by William Pollak on Thu, 2023-08-10 20:36
Thank you!
Permalink Submitted by William Marton on Fri, 2023-08-11 19:42
Maybe Congress should write a letter stating that non-eligible designated beneficiaries and succesor beneficiaries subject to the ten-year rule simply have to withdraw all assets by the end of the period. It would make life a lot easier for the IRS and taxpayers.
Permalink Submitted by David Mertz on Fri, 2023-08-11 21:39
wilbur, Congress does not interpret the tax code, Congress writes the tax code. If Congress wants to make it so that the IRS cannot interpret the tax code as requiring some of these beneficiaries to be subject to annual RMDs, Congress would have to do that by amending the tax code, not by writing a letter.
Permalink Submitted by William Marton on Mon, 2023-08-14 22:14
Yes, Congress writes the tax laws and the IRS is responsible for interpreting them. However, during the public comment period on the proposed 2022 rules many individuals and organizations argued that the IRS’s interpretation of Congressional intent re. the ten-year rule is incorrect and is not a straightforward reading of the SECURE Act. The Congressional Report on the Act by the Committee on Ways and Means explicitly states that “the 10-year rule is the general rule for distributions to designated beneficiaries after death (regardless of whether the employee (or IRA owner) dies before, on, or after the required beginning date) unless the designated beneficiary is an eligible beneficiary as defined in the provision. Thus, in the case of an ineligible beneficiary, distribution of the employee (or IRA owner’s) entire benefit is required to be distributed by the end of the tenth calendar year following the year of the employee or IRA owner’s death.” There is no mention of required RMDs during years 1-9 and based on the Committee’s Report, it can be argued that the “at least as rapidly” standard was either eliminated or possibly incorporated into the ten-year rule. All of this of course could be clarified if Congress passed a specific law or an amendment stating that RMDs are not required during the ten-year period. But given that Congress is so dysfunctional right now and not likely to pass any meaningful tax legislation, it would be helpful in the meantime if the leaders of the tax writing committees clarifed what they think is the correct interpretation of the ten-year rule. It might provide the IRS some cover to backoff their position and move toward a more straightforward interpretation of SECURE Act 1.0.