Custodian Won’t Distribute Past Dec. 31

Submitted by fred port on Fri, 2020-01-17 20:35

I missed the Dec. 31 deadline for my 2019 IRA RMD and will file Form 5329 with an reasonable explanation. I understand I am to take my 2019 RMD as part of that process. My custodian will not distribute my 2019 RMD, claiming IRS regs forbid it doing so after Dec. 31. Any distribution now, the custodian says, will be part of my 2020 RMD. How should I proceed? Thanks!



Submitted by Alan - IRA critic on Fri, 2020-01-17 20:46

  • Technically, the custodian is correct but it does not make any difference.  Missed RMDs are added to the current year’s RMD even though the penalty (if the IRS did not waive it) would only be for the missed year itself.  You should do as you originally planned, which is to withdraw the amount that was your missed 2019 RMD, and then file Form 5329 to request the penalty waiver. You could either take out the 2020 RMD at the same time or wait until year end to do it.
  • Note that distributions are not flagged in any manner as RMDs on the 1099R. You will get a 1099R for 2020 showing your total distribution with no breakdown as to the RMD for any particular year or just an additional amount you wanted to withdraw. So do not worry that the the IRS will not understand that you made up the late RMD for 2019. 

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