Law & Policy

IRS delays effective date for portion of upcoming RMD regulations 

Middle aged couple enjoying the beach  
January 15, 2025
IRS has delayed the anticipated effective date for a portion of upcoming final regulations on SECURE 2.0 Act of 2022 (Div. T. of Pub. L. No. 117-328) changes to the required minimum distribution (RMD) rules for employer-sponsored retirement plans and IRAs. Last year’s proposal included an anticipated effective date of Jan. 1, 2025, but commenters raised concerns about being able to timely implement parts of the new rules. In response, IRS is delaying until Jan. 1, 2026, the effective date for some — but not all — of the proposal’s provisions. Before the final regulations take effect, taxpayers must comply with a reasonable, good-faith interpretation of SECURE 2.0.

Delayed provisions

The delay in the effective date applies to the following provisions:
  • Surviving spouse treated as participant.
    Under SECURE 2.0, a surviving spouse who is the participant’s sole beneficiary and is entitled to life-expectancy payments may elect to be treated as the participant for certain RMD purposes. The proposal would make this treatment automatic if the participant dies before RMDs start, but not after.
  • Payments to beneficiary of surviving spouse.
    The proposal would prohibit plans from treating a surviving spouse’s beneficiary as an “eligible designated beneficiary” when the spouse dies after starting RMD payments (or after payments should have started). For defined contribution plan beneficiaries, this means any remaining benefit would need to be paid in full within 10 years of the spouse’s death.
  • RMDs for participants with pretax and Roth accounts.
    SECURE 2.0 eliminated RMDs before death from Roth accounts in employer-sponsored plans. For participants with both pretax and Roth accounts, the proposal would clarify that payments from the Roth account during the participant’s life would not count towards the RMD owed from the pretax account.
  • Corrective distributions that reduce excise tax.
    The proposal includes a provision clarifying that when a corrective distribution is made to reduce the excise tax on missed RMDs to 10%, the distribution counts only toward the missed RMD and not toward the RMD due for the year in which the correction occurs. (IRS did not delay the effective date for a similar provision relating to corrective distributions from IRAs.)
  • Impact of divorce on qualified longevity annuity contracts (QLACs).
    A plan participant’s former spouse may continue to be the designated beneficiary of a QLAC with a joint-and-survivor feature if required by a qualified domestic relations order (QDRO) or other separation agreement. The proposal would clarify that other separation agreements satisfy this requirement only if the plan isn’t subject to either the Internal Revenue Code or ERISA’s QDRO rules.

Effective date not delayed for certain provisions

IRS did not delay the effective date for every provision in the proposal. The effective date remains Jan. 1, 2025, for proposed provisions relating to see-through trusts and updates to the life expectancy and uniform lifetime tables. A separate provision establishing a methodology to value partial annuities for defined contribution plan RMDs was proposed to be effective Jan. 1, 2026. IRS has not extended that proposed effective date.

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Margaret Berger
Brian J. Kearney

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