Applicability date set for required minimum distribution regulations

Treasury and the IRS announced on Wednesday (Announcement 2025-2) that certain portions of future regulations finalizing proposed regulations for required minimum distributions (RMDs) for retirement accounts such as individual retirement arrangements and 401(k)s will apply beginning in the 2026 distribution calendar year.

In 2024, the IRS issued proposed regulations (REG-103529-23) amending Regs. Secs. 1.401(a)(9)-4, 1.401(a)(9)-5, and 1.401(a)(9)-6 to take into account changes relating to RMDs made by the SECURE 2.0 Act of 2022 (Division T of the Consolidated Appropriations Act, 2023, P.L. 117-328). The provisions of the 2024 proposed regulations were generally proposed to apply for purposes of determining RMDs for calendar years beginning on or after Jan. 1, 2025. Some commenters to the proposed regulations stated it would be difficult to implement many of the provisions of the future final regulations in a timely manner if the Jan. 1, 2025, applicability date set forth in the 2024 proposed regulations is retained in the final regulations.

In response to these concerns, the provisions of future final regulations amending Regs. Secs. 1.401(a)(9)-4, 1.401(a)(9)-5, and 1.401(a)(9)-6 to be issued pursuant to 2024 proposed regulations are anticipated to apply beginning in the 2026 distribution calendar year.

For periods before the applicability date of these amendments, taxpayers must apply a reasonable, good-faith interpretation of the statutory provisions underlying the amendments.

— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.