Reporting RMD

[MT-19]

2019 was the first year for my RMD. I also retired in 2019. I Had 3 retirement accounts, indywidual IRA account with Fidelity, 403(B) with fidelity and 403(B) with TIAA.  In December 2019,  I  combine required amount of RMD from my Fidelity IRA and TIAA and took it from my Fidelity IRA. I took a separate RMD from my Fidelity 403(b) account. Accordingly I received two 1099-R from Fidelity.  How should I report to IRS that one of my 1099-R refers also to RMD from TIAA?   I didn't get any statement from TIAA related to my required RMD.  I called TIAA and didn't get any clear answer except that they confirmed correct amount for RMD.

Also my understanding is that since I took my RMD in December 2019 I should report it on my 2019 tax report. Is that correct?

[ColeenD3 · Accepted solution]

So you did not get a 1099-R for your 403(b) from TIAA? Be sure that they distributed the money in 2019. You should have gotten one.

Yes, you met your RMD, (assuming TIAA followed through). It would be reported on your 2019 return.

Combining Different Types of Accounts

RMDs from non-Roth IRAs can all get bundled together. That is, after calculating the RMD for each of your non-Roth IRAs (including traditional IRAs, rollover IRAs, SEP IRAs, and SIMPLE IRAs), you can then add up all of those RMDs and take that total RMD from any combination of those accounts.

@MT-19

Employer-sponsored defined contribution plans — such as a 401(k) — work differently than IRAs. With them, you must calculate your RMD from each plan and take it from that plan. (Exception: If you have multiple 403(b) plans, you can combine the RMDs from those plans and take it from either of the 403(b) plans — much like you can do with IRAs.)

[robtm]

It doesn't matter from which account you withdraw your RMD from, just so the total required RMD of all accounts is withdrawn. You could combine all of your RMD's and take it from one account or you could take the required RMD from each account. Combining your  RMD's from TIAA and Fidelity IRA  is fine, jut as long as you also took the required RMD from your Fidelity 403(B) account, which it seems you did. Just enter the 2 1099-r's as retirement income.

[dmertz · Accepted solution]

You said, "TIAA and took it from my Fidelity IRA," which is impermissible if the TIAA account is truly a 403(b).  Did you mean to say instead that your TIAA 403(b) RMD was taken from the Fidelity 403(b) along with the Fidelity 403(b)'s RMD?

If the distribution from the Fidelity 403(b) was sufficient to cover both the Fidelity 403(b) RMD and the TIAA 403(b) RMD, you don't have any problem there.  If no distribution was made from the TIAA 403(b), you won't have any income from TIAA to report.

The RMD for your IRA(s) can can be aggregated and the total IRA RMDs can only be satisfied from your IRA(s).  The the amount Form 1099-R with the IRS/SEP/SIMPLE box marked only applies to satisfying the RMD(s) for your IRA(s).  Your RMDs for the 403(b) accounts can be aggregated and the total 403(b) RMDs can only be satisfied from your 403(b) in any combination.  The amount on the Form 1099-R without the IRA/SEP/SIMPLE box marked only goes toward satisfying the RMD for the 403(b) accounts.  If either Form 1099-R shows an amount less than the total RMD for that type of retirement account, you have an excess accumulation subject to a 50% excess accumulation penalty unless corrected and you request a waiver of the excess-accumulation penalty.

[MT-19]

I understand now, that I met total requirement for my three retirements accounts, but I should not combine RMD from Fidelity IRA and 403(b) from TIAA.  So what are my options now? How should I fix it? 

I also learned that nondistributed 2019 RMD will be forgotten due to coronavirus. Is that true? 

[fanfare]

@MT-19 read the answer from dmertz directly above your last question

[JohnB5677 · Accepted solution]

This year (2020) retirees can skip required minimum distributions from their retirement savings.

All Required Minimum Distributions (RMDs) have been waived for 2020. This applies to both Roth and Traditional retirement accounts. Individuals required to take minimum distributions from retirement accounts can completely forego, not just postpone, the distribution for 2020.

Likewise, RMDs from inherited IRAs have been waived. This allows people to avoid withdrawing assets when the market is down, assuming they can afford to do so.

[MT-19]

Thank you for your clarification.  The 1099-R which supposed to cover Fidelity IRA and TIAA 403 (b) does have RA/SEP/SIMPLE box marked. It is clear for me now that I made to big distribution but not covering RMD from my TIAA 403(b) account.  I did it in the Fidelity office based on their recommendations. Again what should I do now

[dmertz · Accepted solution]

Ah, yes, I failed to notice that 2019 was your first RMD year.  You can entirely skip the remainder of your 2019 RMD and there is no need to file 2019 Form 5329 to request a waiver of an excess accumulation penalty because there is now no excess accumulation in this case because of the CARES Act that became law 4 days ago.  Your 2020 RMDs are also waived.  Just be sure that you take the 2021 RMDs properly, aggregated IRA RMDs from IRAs and aggregated 403(b) RMDs from 403(b)s.

[MT-19]

Thanks a lot again. But to be sure my problem relates to RMD for 2019 and this was my first year for RMD which means that I could do it before April 1 2020. Will this be still forgotten?

[dmertz · Accepted solution]

As a result of the CARES Act, you no longer have to complete any 2019 RMDs since 2019 was your first RMD year.  There is a special provision in the CARES Act to this effect.

[MT-19]

Thanks a lot

You gave me answer on my next question. Also as I mentioned in another reply, I made that distribution in Fidelity Office working with their adviser/specialist.

[FJM]

I took my 2019 RMD in early Feb of 2020 i have not filed taxes yet, can i return it and remove it from my taxes?

[dmertz]

Yes, if is done by the 60th day following the date of the distribution.  If you are beyond that deadline, you have up to 3 years following the date of the distribution roll it over if it qualifies as a coronavirus-related distribution.

[macuser_22]

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@dmertz wrote:

Yes, if is done by the 60th day following the date of the distribution.  If you are beyond that deadline, you have up to 3 years following the date of the distribution roll it over if it qualifies as a coronavirus-related distribution.

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I must have missed that part.  Where does the "3 year rollover" provision come from?  I don't see where it says that the 60 day rule is suspended.  Maybe I read it wrong.