Use of Uniform Table for Surviving Spouse (Inherited IRA)
IRS Pub 590-B (Rev 3-19-2025 for use in preparing 2024 returns) is already referring to a Surviving Spouse’s use of Uniform Table (in spite of Proposed Regs not yet being finalized).
According to the Proposed Regs, use of the Uniform Table is only acceptable if the Surviving Spouse’s Inherited IRA RMD’s COMMENCE in year 2024 or later. Yet Pub 590-B doesn’t give such specific guidance. I can imagine reading the Pub and concluding you can use Uniform Table regardless of the year RMD’s commenced.
Pub 590-B ALSO doesn’t mention anything about an Election –
Not even under the section, “Owner died on or after Required Beginning Date (RBD)” (in other words, even when IRA owner had started their own RMD’s already before their death). In the proposed regs, if RBD had been reached, use Uniform Table is NOT the default but has to be properly elected (though plan can make it the default, the IRS does not make it the default automatically).
Any opinions on this? And any word on when the IRS expects to finalize the (new in July 2024) Proposed Regs? (Or did I miss that they’d already been finalized?!) Thanks so much!
PS I suppose 590-B MIGHT reflect the direction the IRS is heading-
That they are planning to make the election the default (even if RMD’s had already begun), and MAYBE they’ll even allow use of Uniform Table for RMD’s that commenced prior to 2024 (for ease of administration).
But 590-B is notoriously “sketchy” on Inherited IRA rules, and penalties are so high if you under-calculate an RMD…
Permalink Submitted by Valerie Hadley on Fri, 2025-05-23 02:45
I can’t seem to edit post above yet, so to clarify: The IRS Pub DOES refer to the (“327”) election in a few places – but not under the “Owner died on or after Required Beginning Date” section of Pub. Instead the following sub-header simply says:
Surviving spouse is sole designated beneficiary. If you are the owner’s surviving spouse, then the applicable denominator continues to be determined each subsequent year, using either Table I or Table III.
Note: Table I is proper if either using the deceased owner’s Divisor (if deceased was much younger than SS) OR if no Section 327 election was made.
Permalink Submitted by Alan - IRA critic on Fri, 2025-05-23 11:25
As in the case of Secure 1.0 proposed Regs, Pub 590 B was often out of sync with either the proposed Regs or minor changes were made when the final Regs were published which were incorporated in later editions of 590 B. I don’t expect many changes regarding Sec 327 of Secure 2.0, but anything is possible.
As you indicated, the IRS intends the election to be automatic when the spouse passed prior to RBD, but when they pass post RBD many spouses may miss the deadline to make the election. That said, in many cases an election into full ownership will be appropriate instead of Sec 327.
Per Announcement 2025-2, which includes the Sec 327 proposed Regs, the IRS concluded that they anticipate these Regs to become final in 2025 and the applicability date is extended to 1/1/2026.
Once finalized, the available paths for surviving spouse include:
Basic beneficiary only (an error frequently made by SS beneficiaries)
Basic beneficiary, then full owner by default, election, or spousal 60 day rollover
Basic beneficiary, then treated as participant by default or election
Basic beneficiary, then treated as participant, then election or default to full ownership or 60 day spousal rollover.
Note that there was a recent thread posted here regarding how and when a surviving spouse can be treated as the “sole beneficiary”, as the IRS has not clarified the “when” portion of that question. This is of course critical to the Sec 327 election. Noted expert Natalie Choate has stated that the SS could be treated as the “sole beneficiary” under the separate account rules even if there were originally other beneficiaries who did not disclaim or were paid off by 9/30 of the following year. The separate account (or separated accounting in qualified plans) needs to be created by the end of the year following the year of spouse’s death, and the SS would then be treated as the sole beneficiary both for purposes of electing to assume full ownership of the inherited IRA or defaulting or electing the Sec 327 treatment. It would be nice if the IRS better clarified this in future Pub 590 B editions.