Tax and financial advice from the Silicon Valley expert.

Reached age 72 in 2023? No RMD required.

The IRS just issued guidance to retirement account (including IRAs and 401(k)s) trustees and custodians that should serve as a reminder to retirement account owners.

SECURE 2.0 Act, enacted December 29, 2022, changed the applicable age for required minimum distributions (RMDs) from age 72 to age 73 . That means retirement account owners who reach age 72 during 2023 aren’t required to take a minimum distribution from their retirement accounts for this year. (Note that Roth accounts don’t have required minimum distributions during the owner’s lifetime.)

Retirement account trustees and custodians, including many banks and brokerage companies, weren’t able to update their software early this year, so they sent some erroneous notifications to their customers indicating that required minimum distributions should be paid.

In Notice 2023-23, the IRS directed retirement account trustees and custodians to issue corrected notices to their customers by April 28, 2023.

Retirement account trustees and custodians must file 2022 Form 5498 to IRA owners and the IRS by May 31, 2023. For IRA account owners who will reach age 72 during 2023, box 11, indicating a required minimum distribution is required, should be blank.

Retirement account owners who reached age 72 during 2022 are still required to take their 2022 required minimum distributions no later than April 1, 2023.

If you have a question about required minimum distributions, see your tax advisor who is familiar with these rules.

Tax and financial advice from the Silicon Valley expert.