You want to generally look here: Retirement plan and IRA required minimum distributions FAQs
From this IRS resource we find:
If an account owner fails to withdraw the full amount of the RMD by the due date, the amount not withdrawn is subject to a 50% excise tax. SECURE 2.0 Act drops the excise tax rate to 25%; possibly 10% if the RMD is timely corrected within two years.
The account owner should file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return for the year in which the full amount of the RMD was required, but not taken.
Also we go on to find this:
... the penalty may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. In order to qualify for this relief, you must file Form 5329 and attach a letter of explanation.
- You can file this form with your tax return or separately. If you missed RMDs for multiple years, file Form 5329 separately for each year, using the form specific to that year. You can find prior year forms here: Prior year forms and instructions Mail the completed form(s) to the IRS location where you would currently be required to file Form 1040,
- Complete the name and address section of the form, enter the missed RMD amount in Part IX line 52, line 53 as instructed and “RC” and the amount of the shortfall you want to be waived in parentheses on the dotted line next to line 54. Subtract this amount from the total shortfall you figured without regard to the waiver, and enter the result on line 54.
Thank you for the opportunity to answer your questions @mhale34
All the best,
Marc T.
TurboTax Live Tax Expert
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