Notice 2024-35: Relief with respect to certain required minimum distributions
Relief with respect to certain required minimum distributions under section 401(a)(9)
The IRS today released Notice 2024-35 providing relief with respect to certain required minimum distributions (RMDs) under section 401(a)(9) that are not made in 2024 (i.e., 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).
This relief was provided with respect to certain RMDs in 2021, 2022, and 2023, and is being extended to certain RMDs in 2024.
Notice 2024-35 also announces that the final regulations intended to be published relating to RMDs are anticipated to apply for purposes of determining RMDs for calendar years beginning on or after January 1, 2025.
Background
Section 107 under Division T of the Consolidated Appropriations Act, 2023, titled “SECURE 2.0 Act of 2022” (SECURE 2.0 Act) amended section 401(a)(9)(C) to delay the required beginning date applicable to section 401(a) plans and other eligible retirement plans described in section 402(c)(8), including IRAs.
- For an IRA owner who attains age 72 after December 31, 2022, and age 73 before January 1, 2033, the new required beginning date (that is, the date by which RMDs must begin) is April 1 of the calendar year following the calendar year in which the individual attains age 73, rather than April 1 of the calendar year following the calendar year in which the individual attains age 72.
- This amendment to section 401(a)(9)(C) is effective for distributions required to be made after December 31, 2022, with respect to individuals who will attain age 72 after that date.
- As a result of this amendment, IRA owners who will attain age 72 in 2023 (that is, individuals born in 1951) will have a required beginning date of April 1, 2025, rather than April 1, 2024. This delay in the required beginning date means that these IRA owners (who, prior to enactment of the SECURE 2.0 Act, would have been required to take minimum distributions from their IRAs for 2023) will have no RMD due from their IRAs for 2023.