The IRS did waive the penalty for failing to take required minimum distributions (RMDs) from inherited IRAs for 2024. However, TurboTax might still prompt you to complete the waiver form for a couple of reasons:
- Verification: TurboTax may ask you to complete the waiver form to ensure that you are aware of the waiver and to document that you are not required to take an RMD for 2024
- Future Compliance: Completing the waiver form can help ensure that you are in compliance with IRS rules and regulations, especially if there are any changes or updates in the future
- Because 2023 and 2024 are still included in your 10-year withdrawal period, even if you didn't take an RMD because the IRS waived missed RMD penalties during those years.
- If you are subject to the 10-year rule for inherited IRAs, you can simply indicate that the required distribution for 2024 was $0. This will prevent TurboTax from unnecessarily preparing waiver Form 5329 Part IX since the penalty waiver is automatic
For more details on beneficiary rules for retirement accounts, you can refer to the IRS page on retirement topics for beneficiaries and the IRS page on required minimum distributions for IRA beneficiaries.
