Anticipated applicability date for future final RMD regs. announced

The IRS said Monday in Announcement 2026-7 that it anticipates that portions of final regulations to be issued regarding required minimum distributions (RMDs) will apply for the distribution calendar year that begins no earlier than six months after the date that those regulations appear in the Federal Register.

The future final regulations, which will be issued pursuant to 2024 proposed regulations, will amend Regs. Secs. 1.401(a)(9)-4, 1.401(a)(9)-5, and 1.401(a)(9)-6.

In the interim, taxpayers must apply a good-faith interpretation of the statutory provisions underlying the regulations under Sec. 401(a)(9), the IRS said.

Background

The IRS published proposed regulations regarding RMDs under Sec. 401(a)(9) in February 2022 to reflect changes in the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 (Division O of the Further Consolidated Appropriations Act, 2020, P.L. 116-94).

Then the SECURE 2.0 Act of 2022 (Division T of the Consolidated Appropriations Act, 2023, P.L. 117-328) included several RMD provisions. In response to comments, the IRS decided that some changes could be included in final regulations, but that new proposed regulations should address other changes.

Both the final regulations (T.D. 10001) and the new proposed regulations (REG-103529-23) were published in the Federal Register in July 2024, with the provisions of the 2024 proposed regulations slated to apply for determinations of RMDs for calendar years beginning on or after Jan. 1, 2025.

The one exception to the Jan. 1, 2025, application date was Prop. Regs. Sec. 1.401(a)(9)-5(a)(5)(v), relating to the valuation of an annuity contract under the partial annuitization option in Section 204 of SECURE 2.0.

However, commenters said it would be difficult to implement many of the future final regulations in a timely manner if the 2025 applicability date in the proposed regulations was retained in the final regulations. They cited specific concerns with the challenges of implementing the final regulations to be adopted pursuant to the proposed amendments to Regs. Secs. 1.401(a)(9)-4, 1.401(a)(9)-5, and 1.401(a)(9)-6.

In response to the comments, the IRS issued Announcement 2025-2, which provided that final regulations amending those three sections likely will apply no earlier than the 2026 calendar year. In the interim, the 2025 announcement stated that 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 Martha Waggoner at Martha.Waggoner@aicpa-cima.com.