The IRS has released updated guidance related to Required Minimum Distributions (RMD), specifically addressing recent proposed changes to Section 401(a)(9) rules. Notice 2022-53 (Notice), published in October, addresses several topics, including (1) an indication that the final regulations will implement significant changes to the RMD requirements made by the SECURE Act of 2019; (2) relief will be provided for defined contribution plans that failed to make RMDs in 2021 or 2022 to beneficiaries under the new 10-year payment rule, as well as excise tax relief to certain beneficiaries receiving the RMDs; and (3) the expected timing of updated final regulations under the aforementioned code section.
Action item: In reference to 2021 distributions, the IRS has provided guidance that plans and taxpayers should rely on the current Section 401(a)(9) regulations and exercise a “reasonable, good faith interpretation” to comply with the proposed regulations of the SECURE Act until the final regulations are released.