HOUSING ALLOWANCE DISTRIBUTION COUNT TOWARDS RMD
CLIENT HAS HOUSING ALLOWANCE FORM 403B THAT IS HIGHER THAN THE RMD OUT OF THE 403B. HER RMD IS APPROX. $1600 FROM THE 403B (BUT HAS OTHER IRAS’) AND HER HOUSING ALLOWANCE IS APPROX. $3000.00
QUESTIONS:
1. IS THE HOUSING ALLOWANCE DISTRIBUTION FROM THE 403B COUNTED TOWARDS HER TOTAL RMD FOR 2023?
2. SINCE THE HOUSING ALLOWANCE IS NON-TAXABLE, IT DOESN’T COUNT TOWARDS HER RMD FOR 2023?
3. IS ONLY THE DIFFERENCE BETWEEN THE RMD FOR 2023 AND THE HOUSING ALLOWANCE COUNT TOWARDS HER 2023 RMD?
THANK YOU,
DOUGLAS
Permalink Submitted by Alan - IRA critic on Fri, 2023-10-20 00:07
Any 403b distributions reported on Form 1099R are credited against the annual RMD. It does not matter whether these amounts are tax free housing allowance dollars.