Treasury, IRS update required minimum distribution guidance

The Treasury Department and the Internal Revenue Service issued final regulations Thursday to update the rules for required minimum distributions.

The final regs flesh out changes made by the SECURE Act and the SECURE 2.0 Act affecting retirement plan participants, IRA owners and beneficiaries. Simultaneously, the Treasury and the IRS issued proposed regulations addressing other RMD issues under the SECURE 2.0 Act.

Some of the changes come in response to comments received on the proposed regulations issued in 2022, the final regulations generally follow those proposed regulations.

The Treasury and the IRS reviewed comments suggesting a beneficiary of an individual who has started required annual distributions should not be required to continue them if the remaining account balance is fully distributed within 10 years of the individual’s death as required by the SECURE Act. However, the Treasury and the IRS decided the final regulations should retain the provision in the proposed regulations requiring such a beneficiary to continue receiving annual payments.

The new proposed regulations include provisions for which the Treasury and the IRS are soliciting more public comments, including provisions addressing other changes relating to RMDs made by the SECURE 2.0 Act. For details, see the proposed regulations.