Start Receiving RMDs by April 1, IRS Reminds
The IRS on March 15 issued a reminder that the retirement plan participants and holds of IRAs and IRA-based plans who attained age 70½ during 2017 must starting receiving required minimum distributions (RMDs) by April 1, 2018.
The deadline applies to all employer-sponsored retirement plans, including:
The deadline also applies to:
The April 1 deadline does not apply to Roth IRAs.Calculating the RMD
Affected taxpayers who turned 70½ during 2017 must figure the RMD for the first year using the life expectancy as of their birthday in 2017 and their account balance on Dec. 31, 2016. The trustee reports the year-end account value to the IRA owner on Form 5498
in Box 5. Worksheets and life expectancy tables for making this computation can be found in the appendices to Publication 590-B
Most taxpayers use Table III (Uniform Lifetime) to figure their RMD, the IRS says. For a taxpayer who reached age 70½ in 2017 and turned 71 before the end of the year, for example, the first required distribution would be based on a distribution period of 26.5 years. A separate table, Table II, applies to a taxpayer married to a spouse who is more than 10 years younger and is the taxpayer’s only beneficiary. Both tables can be found in the appendices to Publication 590-B.First Year Only
The April 1 RMD deadline only applies to the required distribution for the first year. For all subsequent years, including the year in which recipients were paid the first RMD by April 1, the RMD must be made by Dec. 31. A taxpayer who turned 70½ in 2017 and receives the first required distribution (for 2017) on April 1, 2018, for example, must still receive the second RMD by Dec. 31, 2018.A Caveat
Though the April 1 deadline is mandatory for all owners of traditional IRAs and most participants in employer-provided retirement plans, some such participants can wait longer to receive their RMD. Employees who are still working usually can, if their plan allows, wait until April 1 of the year after they retire to start receiving these distributions.
More information on RMDs is available here