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.
Permalink Submitted by Valerie Hadley on Fri, 2025-05-23 21:16
Alan WOW you are amazingly helpful!!
I have one remaining question, as the area I get most confused with is:
Applicability dates (whether of law or regs-) vs date of the law itself (that in this case underlies the proposed regs we’re speaking of), and when something can be relied upon. Section 327 is a great example for this. This will be from my perspective as a Tax practitioner.
So first of all, you’ve got the law itself, which is the SECURE Act 2.0, from Section T of the ‘‘Consolidated Appropriations Act, 2023’’. It’s nebulous in its definition regarding the Section 327 election, but is already law, and hence I believe can already be relied upon (at least “in good faith” as to its interpretation) – and hence also why the IRS can even put these rules in their Publication 590-B–would you agree?
I’m saying this because-
Proposed regs can NOT be relied upon as authority, but
When the final regulations came out in July 2024, I believe they included verbiage referring to having relied on a “good faith interpretation” of the proposed regs (as well as a good faith interpretation of the law itself??). (And otherwise, I think the prior finalized regulations were to have been followed (prior to the new finalized regs going into effect).
I’ve now also read (google search, I know not a reliable source!) that following proposed regs IS CONSIDERED a “good faith interpretation” of following the law – until regs are finalized. (This in spite of the fact that Proposed regs have no authority.)
And now you’re mentioning that the proposed regs applicability date won’t be until 2026. But in the way forementioned (using them as a good faith interpretation of the law) – in that abstract sense -they are already significant, right?
And when the IRS finalizes them – it will STILL have been appropriate to follow them – and hence looking at this example:
IRA owner had died in 2022 having NOT reached their RBD.
Surviving spouse is beneficiary of Inherited IRA account.
In 2024 deceased IRA owner would have reached their applicable age (of 73 I think). So RMD’s for SS commence in 2024.
Proposed Regs say the election is by default in 2024. SO, SS can use the Uniform Table.
Now like you mentioned, there’s some question of whether one could do this if the deceased IRA owner HAD reached RBD – even if a 2023 death, and 2024 being the first year SS beneficiary has to make RMD.
Because how would SS make the election? (Could they attach something to the 1040 perhaps? Put in a formal request to the IRA plan administrator? -even if Plan hasn’t put in place any protocol regarding Section 327 election yet?
But now how does this work/what significance does it have when the proposed regs are finalized – and yet don’t go into EFFECT until 2026? The law was already in effect, just not defined well yet. Perhaps it could be argued that (in the example just above) they did their best in good faith to satisfy section 327 of the consolidated reconciliation act. (SAFER in REAL LIFE perhaps to use Single life table in 2024.)
But it’s difficult to define rules when REGS go into effect after a LAW -and hence I suppose my confusion is somewhat justified.
But
Is any of my law/applicable dates/facts and reasoning above faulty? and
Is the applicability date of 2026 mostly just relevant because:
A. It can now be relied upon absolutely starting on that date it goes into effect, and
B. That’s when the PLAN ADMINISTRATORS have to have all their protocols in place to HANDLE all the related procedures. But were administrators obligated to TRY to follow Section 327 previously anyways, given it was already law?
C. If there are some Proposed regs (that become final in 2026) that go “beyond” the actual law (of SECURE 2.0/section 327) then I suppose THOSE regs would only have relevance beginning in 2026.
D. Of final note, if the SS waiting for RMD’s to go into effect DIES before the regs are finalized, interpretation of these matters could be particularly significant (for the subsequent beneficiaries).
(Note: I’ve used the terms “goes into effect” and “applicability date” more or less synonymously in this post).
I HOPE I am finally understanding these date questions reasonably well; I’m actually a tax analyst also- and have been trying to construct a flow chart of Inherited IRA rules under Secure 2.0 which I would feel pretty confident about EXCEPT for these date issues! THANK YOU!!!
Permalink Submitted by Valerie Hadley on Fri, 2025-05-23 21:28
sorry my formatting gets lost above making it harder to read 🙁
Permalink Submitted by Alan - IRA critic on Fri, 2025-05-23 23:51
Probably an oversimplification, but I interpret the applicably date of a Reg as when it becomes mandatory, so 2026 for Sec 327. Prior to that date, the taxpayer can use either the prior Regs or a food faith interpretation of the proposed Regs. That effectively becomes the best to two worlds for the taxpayer because they can pick and choose which of the Regs is more advantageous.
Secure 1.0 was a good example as it was effective in 2020, but it took over 4 years for the IRS to arrive at final Regs. The featured issue was beneficiary RMDs under the 10 year rule if decedent passed post RBD. It took the IRS 4 years to finalize that requirement, but they waived the 2021-2024 beneficiary RMDs and only made them mandatory starting in 2025.
It would help if Congress made effective dates of legislation well more than a few days after it was signed into law, which was the case for both Secure Acts. There is no time to bring interested parties up to date including custodians, taxpayers, even the IRS. Thankfully, the IRS seems to understand that taxpayers are confused by this process and they typically do not question any reasonable interpretation.