Industry News

On October 11, 2022, Groom Law Group published its brief, IRS Required Minimum Distribution (“RMD”) Relief for Beneficiaries for 2021 and 2022. The brief reports on IRS Notice 2022-53, as issued on October 7, 2022.

The Notice provided guidance that the final regulations related to the required minimum distribution (RMD) rules under Internal Revenue Code (IRC) § 401(a)(9) will apply no earlier than the 2023 distribution calendar year. Notice 2022-53 also provides guidance related to certain RMD provisions that apply for 2021 and 2022 for post-death distributions to beneficiaries under IRAs and defined contribution plans.  

Notice 2022-53 provides transitional relief for 2021 and 2022 for RMDs that may not have been made in 2022 in compliance with the Proposed RMD Rule issued on February 24, 2022, or in 2021 consistent with what the IRS would consider to be a good faith interpretation of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).

Specifically, Notice 2022-53 provides that:

• Pending RMD regulations (for all plan types) will not be effective before the 2023 distribution calendar year;
• Corrections are not required to be made for missed 2021 “specified RMD” payments; and
• 2022 RMD payments do not need to be made for beneficiaries receiving “specified RMD” payments.

The Notice’s definition of a “specified RMD” is rather complex. Under the proposed regulations, it refers to any distribution that would be required in accordance with IRC 401(a)(9) in 2021 or 2022 under a defined contribution plan or IRA subject to the rules of IRC 401(a)(9)(H) for the year that the employee (or designated beneficiary) died if that payment would be required to be made under certain circumstances.

The brief is available here and Notice 2022-53 is available here.