2024-15: IRS delays new inherited retirement account RMD rules until 2025

The IRS has issued Notice 2024-35, announcing that they intend to issue final regulations related to the SECURE Act’s inherited retirement account rules and that RMDs for certain inherited retirement accounts must begin in 2025.

A major point of contention contained in the proposed regulations that were issued on February 24, 2022, relates to the RMD rules for designated beneficiaries. These beneficiaries are subject to a 10-year distribution rule for retirement accounts inherited from taxpayers who died after December 31, 2019.

Under the proposed regulations, if the decedent had begun taking RMDs, then designated beneficiaries are subject to an RMD requirement during the 10-year distribution period rather than taking the total distribution by the tenth year. Due to confusion resulting from this proposed change, the IRS has delayed its implementation over the last two years. Now, Notice 2024-35 delays the implementation of this provision one more year and provides that the IRS’s final regulations will require designated beneficiaries to begin taking RMDs in 2025.

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