RMD not taken in 2021. Where do I report this?

[barryfieldforwar]

RMD not taken in 2021.  How do I report this?

[DianeW777]

Here is the information you need. If the RMD is received in January, 2022, then there is nothing to report in 2021. It will be reported in 2022 along with the RMD for 2022.  You may be charged a penalty unless you can have the company correct the mistake and issue a 1099-R for 2021.  If they actually made the payment in December, 2021, and you didn't receive it until January, 2022, then you should be getting a Form 1099-R.

Action Steps:

IF you receive the Form 1099-R in 2022 you will need to file a 5329 form and request a waiver of the penalty. (The waiver would only be denied if there is no reasonable explanation and the missed RMD was not taken at all.)

• Waiver of tax for reasonable cause. The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329 as follows.
  1. Complete lines 52 and 53 as instructed.
  2. Enter “RC” and the amount of the shortfall you want 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.
  3. Complete line 55 as instructed. You must pay any tax due that is reported on line 55.
• The IRS will review the information you provide and decide whether to grant your request for a waiver. If your request is not granted, the IRS will notify you regarding any additional tax you may owe on the shortfall.
  • Instructions Form 5329 - It would be unusual for you to be denied relief because you have a situation where this could easily be missed.

[SusanG1949]

In may of 2022 I received a confusing communication from the Thrift Savings Plan.  After calling them, I learned I had a retirement plan there, and they had issued me an RMD for 2021 that was returned due to a bad address.  After 7 months of my hassling them 10+ times to do the re-issue, they sent me two checks (representing the RMDs for 2021 and 2022), and two 1099Rs.  I file electronically using TurboTax Premier.  I entered the 2022 1099R for the 2021 RMD first as an RMD and second as a non-RMD.  TurboTax did not prompt me for additional information.  I cannot figure out how to file the required form for a missed RMD.  I cannot determine if I must file a paper return so as to attach my explanation as to the missed RMD.  Can someone help me?  I'm nearly desperate and can find nothing on this site that answers my questions

[ShirlynW]

 Since you entered the 1099-r, TurboTax generated form 5329.  Form 5329 will be mailed in separately from the return. This link is for Form 5329.

[SusanG1949]

I do not understand your explanation.  Where did TurboTax generate a 5329?  I cannot find it in the list of forms. I understand how to complete the 5329.  We file our return electronically.  Can I file our 2022 1040 electronically and mail the 5329 and my request for waiver separately?  Or do I have to mail our returrn with the 5329?  Thanks a lot for your help.

[DanaB27]

You will have to file Form 5329 with your 2021 amended tax return and request a waiver of the penalty if you have reasonable cause. Please see Relief for Reasonable Cause for additional information. You don't need to file Form 5329 for 2022 since you took the 2022 RMD.

Unfortunately, this can only be done using the "forms" mode which is only available with the TurboTax Desktop software if you do not have a Form 1099-R to file:

1. Enter the forms mode and click on "Open Form" and type "5329".
2. Scroll down to Part IX line 52 and enter the RMD amount that should have been taken. On line 53 enter the amount of the RMD that was actually taken (probably zero if it was missed).
3. Then in the box right under line 53 "Waver of Tax Smart Worksheet" enter the same amount as line 52 (the RMD amount). 
4. Click the "Explanation" button and enter the reason for missing the RMD and your statement requesting a waiver.

If using the TurboTax Online version and have no 2021 Form 1099-R to file, you will have to prepare the 5329 manually.

Download Form 5329 from the IRS website and fill it out the same as above. Print and mail your return with the 5329 form and explanation attached as described in the 5329 instructions.

The 2021 Form 5329 must be attached to your printed and mailed 2021 amended tax return and cannot be e-filed.

Please be aware that you can only use this method if you are requesting a waiver of the penalty and there is no taxable amount on Form 5329 form line 55 that must be transferred to Schedule 2 line 8.

[SusanG1949]

Why would I amend our 2021 return?  It isn't that I didn't report the 2021 RMD, I did not receive the 2021 RMD until 2022.  I am a cash basis tax payer. The issuer sent me a 2022 1099R for the 2021 RMD THEY PAID ME IN 2022, which I have included in 2022 income.  

[Cynthiad66]

The only reason to amend would be to request the Waiver of Penalty for not taking the RMD timely.   You can also just wait until the IRS contacts you with the penalty.  You can request a waiver, at that time.  @SusanG1949