RMD on rollover if still working exception?

Submitted by Scott Cawood on Wed, 2023-03-01 21:02

I have a client that is 76, still works and does not have an ownership interest in her employer. She completed a partial rollover of her 401(k) to her IRA this year and does not plan to retire until next year or later.

Is there any RMD for 2023 relating to this partial rollover of her 401(k)?



Submitted by Alan - IRA critic on Wed, 2023-03-01 21:59

  • If she works into any portion of  2024, no part of the rollover will have to treated as the 2023 401k RMD. As for the IRA, the added balance will not increase her 2023 IRA RMD, but it will be included in the IRA 12/31/2023 value on which her 2024 IRA RMD will be calculated.

Submitted by Scott Cawood on Mon, 2023-03-06 19:25

Thank you so much, is there any IRS code that I can cite for my client?

Submitted by Alan - IRA critic on Mon, 2023-03-06 19:44

Sec 401(a)(9)(C) describes the required beginning date for RMDs. Note the reference to the year of retirement as long as the taxpayer is not a >5% owner of the employer. 

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