Required Minimum Distribution Tax Year 2022

[RPini]

My retired wife turned 72 in June 2022.  We waited until now (January 2023) to set up her Required Minimum Distribution from her former employer, with the understanding that in order to avoid a tax penalty she would be required to take her first RMD before 4/1/2023 and a second RMD this first year also (2023).

She was told by the employee of the Fund Manager that the law changed effective 2023 and now the law says you don't need to take your first RMD until age 73.    It seems to me that the law in effect in 2022 would apply and my wife would still need to make an RMD before 4/1/2023.

Am I correct?   Thanks in advance.

[dmertz · Accepted solution]

You are correct and fund manager is misinformed.  The change to age 73 only applies to those reaching age 72 after 2022.  

[RPini]

Thank you very much.

[Critter-3]

Remember although you delayed the 2022 distribution until April 1st of 2023 you must also take out the 2023 distribution by December 31st of 2023.

[fanfare]

even if your custodian is confused, you can take funds from the IRA and that will be treated as RMD until you satisfy the 2022 RMD amount and then the 2023 RMD amount.

[RPini]

Thank you.  I appreciate that.

[RPini]

Yes.  Thank you.  Our current plan is to calculate and withdraw an RMD amount for 2022 manually prior to 4/1/2023.  We've already set up an annual (auto-calculated) RMD for 2023 and future years.

[fanfare]

your 2022 RMD is based on Dec 31 2021 value while your 2023 RMD is based on the Dec 31 2022 value.

@RPini 

[llivingston1208]

Becky,
I took my RMD from TD Ameritrade $112.56 and looks like they rolled it over into my account. I didn't receive a distribution check. I am attaching two statements that I obtained on TD Ameritrade website.

[MarilynG1]

Did you receive a 1099-R to report the RMD distribution/rollover?  If, so you may have a Code G in Box 7 to indicate this.  Or, you may have two 1099-R's; one with Code G and one with Code 7. 

When entering your 1099-R with Code 7 in TurboTax, you can indicate in the follow-up questions that 'the entire distribution is RMD' and that it was rolled over.  This will not be taxable income for you in this case. A 1099-R with a Code G is never taxable; you are just reporting. 

Here's more info on What is RMD?

@llivingston1208 

[dmertz]

"When entering your 1099-R with Code 7 in TurboTax, you can indicate in the follow-up questions that 'the entire distribution is RMD' and that it was rolled over. "

You can do that, but TurboTax will not treat it as nontaxable because such a distribution is not eligible for rollover.  In addition, the rollover would constitute an excess contribution subject to penalty to the extent that it exceeds the amount that the individual is eligible to contribute as a regular contribution for that year.