By Jenny Kiffmeyer, J.D – The Retirement Learning Center
“I heard that there was another delay in the new RMD rules. Can you clarify which provisions are delayed?”
Highlights of the discussion
On December 18, 2024, the IRS issued Announcement 2025-2, which stated that the applicability date of the 2024 proposed regulations that provide additional guidance on the new required minimum distribution (RMD) rules under the Setting Every Community Up for Retirement Enhancement (SECURE) Act and SECURE Act 2.0 will be extended until January 1, 2026.
Why is there more delay? On July 19, 2024, the IRS simultaneously published final RMD regulations relating to the 10-year rules relating to inherited accounts and proposed regulations covering, among other things, the applicable RMD age for participants born in 1959, distributions from designated Roth accounts, a surviving spouse’s election to be treated as the employee, distributions to a trust beneficiary, treatment of corrective distributions following missed RMDs, and partial annuitization of an individual’s account.
Except for the provision relating to the partial annuitization of an individual’s account, the 2024 proposed regulations were to become effective as of January 1, 2025, so that they would apply at the same time as the 2024 final regulations. However, many commentators said that implementation of the proposed regulations by this date would be very difficult, so the IRS has delayed the applicability until January 1, 2026.
It is key to note that the delay only applies to the effective date of the changes in the 2024 proposed regulations. The January 1, 2025, effective date for the RMD final regulations relating to the 10-year rule that were published at the same time as the 2024 proposed regulations still applies.
Conclusion
We continue to see delays in applicability dates of many SECURE Act and SECURE Act 2.0 provisions, so it is imperative that plan sponsors, advisors and participants stay up to date on the changes. It is important to remember that, even though the effective date of some of these provisions have been delayed, the IRS requires, for periods before the applicability date, taxpayers must apply a reasonable, good faith interpretation of the statutory provisions.
