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IRS Issues Notice 2024-35 to Provide Relief for Certain RMDs in 2024

On April 16, 2024, the Internal Revenue Service (IRS) issued Notice 2024-35, which provides relief regarding certain Required Minimum Distributions (RMDs) for 2024. The relief is applicable to certain RMDs under Internal Revenue Code section 401(a)(9) in 2021, 2022 and 2023, and is also being extended to certain RMDs in 2024.

Specifically, the Notice provides that if certain requirements are met, a plan will not fail to be qualified for failing to make a specified RMD in 2024, and a taxpayer will not be assessed an excise tax for failing to take the RMD. The relief provided in Notice 2024-35 relates to the required distribution changes under the SECURE Act of 2019. It extends prior relief provided in Notice 2023-54 and Notice 2022-53 for another year.

Essentially, the Notice defines a “specified RMD” identically as previously defined in Notice 2023-54 as follows:

“any distribution that, under the interpretation included in the proposed regulations, would be required to be made pursuant to Section 401(a)(9) in 2024 under a defined contribution plan or IRA that is subject to the rules of Section 401(a)(9)(H) for the year in which the employee (or designated beneficiary) died if that payment would be required to be made to:

  • a designated beneficiary of an employee under the plan (or IRA owner) if: (1) the employee (or IRA owner) died in 2020, 2021, 2022, or 2023, and on or after the employee’s (or IRA owner’s) required beginning date, and (2) the designated beneficiary is not using the lifetime or life expectancy payments exception under Section 401(a)(9)(B)(iii); or
  • a beneficiary of an eligible designated beneficiary (including a designated beneficiary who is treated as an eligible designated beneficiary pursuant to Section 401(b)(5) of the SECURE Act) if: [1] the eligible designated beneficiary died in 2020, 2021, 2022, or 2023, and [2] that eligible designated beneficiary was using the lifetime or life expectancy payments exception under Section 401(a)(9)(B)(iii) of the Code.”

In addition, the notice indicated that the Department of the Treasury and the Internal Revenue Service (IRS) intend to issue final RMD regulations that would apply for purposes of determining RMDs for calendar years beginning on or after January 1, 2025.

The Notice is available here.