I missed taking out 2024 RMD distribution, what is the remedy?

[rjs · Accepted solution]

First of all, was 2024 the first year that you were required to take an RMD? (Did you turn 73 in 2024?) If so, you are not really late. You have until April 1, 2025 (not April 15) to take your first RMD. If this is the case, just make sure you take the 2024 RMD before April 1.

If you turned 73 in 2023 or earlier, the RMD is actually late. Take it now, as soon as you can. You will have to file Form 5329 with your 2024 tax return to request a waiver of the 25% penalty for not taking the RMD on time. You will almost certainly get the waiver if taking the RMD late "was due to reasonable error and you are taking reasonable steps to remedy the shortfall." Taking the RMD in January is certainly a reasonable step to remedy the error. You will also include a short statement explaining why it was late and what you did to correct the error.

You will not get a 2024 Form 1099-R for the distribution that you take in 2025. If you have any Form 1099-R for 2024, after you enter all your 1099-Rs in TurboTax and proceed through the interview, you will come to a screen that asks you if you received all the RMD that you were required to take for 2024. If you answer that you did not, it will lead you through requesting the waiver and entering an explanation. In the explanation, in addition to a brief explanation of why it was late, be sure to say that you took the distribution in January.

Unfortunately, there is a defect in the TurboTax interview that makes it impossible to fill out Form 5329 if you did not receive any 1099-R for 2024. The only way to fill it out is in forms mode, which is only available in the desktop TurboTax software, not in TurboTax Online. That means you will have to use the desktop software to file your 2024 tax return.

In any case, you still have to take your 2025 RMD in 2025. Your 1099-R for 2025 will include both the 2025 RMD and the 2024 RMD that you took in January 2025. So you will be paying tax on the RMDs for two years on your 2025 tax return.

[Bishodue]

Thank you.  Your answer is helpful, direct, and encouraging.

[randy5419]

I failed to take the 2024 RMD for a Trust, so I am using desktop turbotax business.   When I follow your instructions to include form 5329, that form is not listed as an option in turbotax business.  Any work-arounds?

[randy5419]

I decided that better place for my post is the TurboTax Business and Farm forum given that it is a software question rather than a tax question.   So I posted there:

https://ttlc.intuit.com/community/business-taxes/discussion/form-5329-needed-but-not-available-in-tu...

[munecarubia]

What tier of TurboTax software would I need to get to file this form?  And is there a way to attach a letter of reasonable explanation?

[AmyC]

All of the desktop versions contain Form 5329. For the steps to enter the 5329, see another post of mine here.

@munecarubia 

[rjs]

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@munecarubia wrote:

And is there a way to attach a letter of reasonable explanation?

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@munecarubia 

The IRS doesn't want a letter. They want a brief explanation. Just briefly state, in a sentence or two, why you didn't take the distribution on time, and what you have done to correct the situation. The instructions at the link that AmyC gave you show how to enter the explanation in TurboTax. You don't attach anything.