Latest! IRS Releases Final RMD Regulations Included in SECURE Acts

The Internal Revenue Service (IRS) will publish final regulations in Federal Register on July 19 for required minimum distributions (RMDs) under the SECURE Act 1.0 and 2.0.

The final regulations confirm that if an individual dies after required minimum distributions (RMDs) begin, annual distributions must continue to be made to beneficiaries until the account is fully depleted within 10 years.

“The final regulations generally finalize the proposed regulations,” said Robert Richter, counsel for retirement education at the American Retirement Association (ARA), after an initial review. “One of the more important elements of the proposed regulations that we expected would not be changed by the final regulations is when RMDs must be established when a participant dies after the required start date.”

Richter explained that under the proposed and now final regulations, distributions to a beneficiary must continue to be made at least as soon as they occurred during the beneficiary’s lifetime, and the full distribution must be made by the end of the applicable period as modified by the SECURE Act (generally 10 years after the participant’s death).

He added that while the IRS has provided relief from this rule through 2024 (the last extension was under Notice 2024-35), it is unlikely there will be another extension.

The final regulations also included some changes to the RMD rules introduced by the SECURE 2.0 Act. At the same time the final regulations were published, the IRS also published proposed regulations interpretation of other changes to RMD requirements under the SECURE 2.0 Act.

Look for future ARA articles that will cover details of some of the changes made in the final regulations.

At first glance

• Two rules have been published:
  • Final provisions on previously proposed matters
  • Proposed regulations for several new provisions of SECURE 2.0
• Final provisions:
  • The requirement for beneficiaries to take distributions at least annually if a participant dies on or after the required start date has been retained.
• Proposed regulations:
  • The focus was on the new provisions of SECURE 2.0, such as the possibility for the surviving spouse to opt for treatment as a participant.