2021 Required Minimum Distributions
For tax year 2020, required minimum distributions (RMDs) were waived. However, for year 2021, you MUST take your annual RMDs from profit-sharing plans, 401(k) plans, 403(b) plans, 457(b) plans, traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs by December 31, 2021.
Roth IRAs do not require a RMD, but there is an exception for inherited Roth 401(k) plans. The beneficiary MUST take RMDs from Roth 401(k) plans.
You must take your first required minimum distribution for the year in which you turn age 72. If you turn age 72 in year 2021, you can either take your first RMD in year 2021 or you can wait and take it as late as April 1, 2022. If you decide to take it in year 2022 by April 1, you MUST also take your 2022 RMD in year 2022 which means you will have TWO RMDs to report on your tax year 2022 income tax return.
Failure to timely take your RMDs may result in paying a 50% excise tax on the amount that was not distributed!
For IRS Frequently Asked Questions on RMDs, click here.
