Acknowledging the difficulty many plan administrators and other payors are having complying with changes made by the SECURE 2.0 Act to certain required minimum distribution (RMD) rules, the IRS has issued Notice 2023-54 granting the following relief:
- Taxpayers who were born in 1951 and received RMDs prior to August 31, 2023, but shouldn’t have because the RMD age requirement was increased to age 73, may roll these distributions back into their retirement accounts even if the 60-day period has lapsed, as long as the rollover is completed by September 30, 2023;
- The proposed inherited IRA rules requiring payments throughout the 10-year mandatory distribution period has been delayed again and these RMDs will not be required to be distributed in 2023 under these proposed rules; and
- The SECURE 2.0 proposed regulations issued by the IRS will apply no earlier than the 2024 distribution calendar year.
SECURE 2.0 made a number of changes to retirement distributions, including increasing the age for taxpayers required to take RMDs from age 72 to 73 for those who turn age 72 after 2022. For those who turn age 74 after 2032, it is increased to age 75.
The Act also changed the RMD rules for inherited IRAs for most beneficiaries, dramatically limiting who could receive lifetime distributions from the account and extending the five-year payout period to 10 years for designated beneficiaries. This change was further complicated when the IRS issued proposed regulations in February 2022. (IRS-2022-0003-0001) Under the IRS proposed regulations, inherited IRAs received from taxpayers who had already begun taking their RMDs must be paid out to most beneficiaries over a 10-year period, rather than by the end of the 10-year period as had been anticipated by many tax professionals.
IRS Notice 2023-54 is available at:
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