As if paying out to an IRA Beneficiary was not confusing enough, the IRS substantially changed the payout options for most beneficiaries by passing the SECURE Act effective 2020. While the regulations made it clear that most non-spouse beneficiaries had to have their Inherited IRAs closed by December 31 of the tenth year after the owner died, it was left unclear whether or not beneficiaries of owners who had reached their RMD status had to take a distribution in the first nine years or were they optional?
After issuing the Proposed Regulations in February 2022 indicating some beneficiaries would have to take a distribution the first nine years, the IRS failed to finalize the Proposed Regulations until July 2024. During that time, the IRS waived the “late penalty” for beneficiaries who did not take an RMD death distribution in years 2021-2024.
Effective 2025, some beneficiaries will have to begin taking death distributions or they will be subject to an IRS penalty of up to 25%. This informational two-hour webinar will answer the who, when, and how questions of calculating RMDs to beneficiaries for 2025. A Sample Letter to beneficiaries to inform them of the rule change and their RMD requirements will be included.
What You’ll Learn
- What is meant by the “Required Beginning Date” to determine which IRA owners are in RMD status at death?
- Do beneficiaries who chose to skip their RMDs in 2021-2024 have to make them up in 2025?
- How do we calculate the 2025 divisor for owners who died beginning in 2020?
- What are the three classes of beneficiaries to determine their payout options?
- What are the new distribution rules regarding a surviving spouse setting up an Inherited IRA?
- Do we use the owner’s age or the beneficiary’s age on the Single Life Table to obtain the divisor for RMD purposes?
- What are the rules for successor beneficiaries when the original owner died before 2020 or beginning in 2020?
- What penalties may be imposed if the beneficiary does not begin death distributions in 2025?
- What are the final regulations for payout options to a trust beneficiary?
Who Should Attend
All CSRs, tellers, operations department reps, call center employees, and anyone who determines who the beneficiaries are for payout options would greatly benefit from this two-hour informational webinar.