Took normal rather than required minimum distribution

[RMDmissed2022]

Tried to take RMD several minutes after markets closed on Thursday, December 29, 2022 and was told by custodian that it was too late to take my 2022 RMD.  Instead, I took a normal distribution effective on December 30 in the same amount as my RMD.  Will I receive a 1099-R for this normal distribution?   

In summary, I took a normal distribution for the entire RMD amount in 2022, but it was not officially an RMD.  How do I report this on my 2022 taxes?  

Thanks for your advice.

[dmertz]

What the custodian probably meant is either it was too late to make the distribution on December 29th but would instead be processed on December 30th, or that the distribution request would not be processed until January 2nd or 3rd.   Regardless, the  distribution you received is still officially your 2022 RMD, although it might be a late-taken RMD.  (RMDs are normal distributions, they are just ineligible for rollover and distributions are RMD until your RMD has been satisfied.)

If the distribution was processed in 2022 and appears on a 2022 Form 1099-R, report it as usual.

If the distribution was instead processed in 2023 and will be reported on a 2023 Form 1099-R, whether or not you must file Form 5329 to request a waiver of the excess accumulation penalty depends on whether or not 2022 was the first year for which you were required to take an RMD.  If so, no Form 5329 is needed.  Tell TurboTax you were not required to take this RMD in 2022.  If you were first required to take an RMD for 2021 or earlier, your 2022 tax return needs to include Form 5329 to request the waiver of the penalty.  The distribution made in 2023 will be taxable on your 2023 tax return along with your 2023 RMD..

[RMDmissed2022]

Thanks for the prompt response.  To further clarify:

On Thursday, December 29, (just after 4:00 PM) I was told it was too late to take a 2022 RMD from my account, but I could and did take a 2022 normal distribution in the exact RMD amount.  That distribution was effective the next day on December 30.  I have not received a 1099-R for this distribution and checking the account website, I see no indication that one is coming.

Are firms required to send a 1099-R for all distributions or just for RMDs?

Whether or not I receive a 1099-R, can I file as having taken my 2022 RMD, or do I need to take additional actions?

Thanks for your further assistance

[DianeW777]

Yes, you can file the distribution on your 2022 tax return. All distributions must be reported on Form 1099-R from any retirement account, IRA or Roth IRA, and all other types. First be sure to check with your financial institution to inquiry about your form.  Since you took distribution in December, they would be required to issue the form for 2022.

They still have some time before they are required to release and/or issue the forms to their recipients. Keep your records for distribution dates and amounts with your tax file. As indicated by @dmertz, you may need to read the agreement to see whether the distribution is technically allowed to be applied to 2023 based on the date issued so close to the end of the year.

[fanfare]

"Yes, you can file the distribution on your 2022 tax return."

you can't put a distribution on your 2022 return that the custodian dated January 2023.

You missed the deadline.

and yes you must always get a 1099-R which also goes to the IRS.

@RMDmissed2022 

[dmertz]

If you don't receive a 2022 Form 1099-R reporting this distribution, the IRA custodian apparently is treating it as a 2023 distribution.  It's still a distribution of your RMD, satisfying your RMD.  An RMD is nothing more than a regular distribution that is not eligible for rollover and is subject to penalty if not taken.  There is no other distinction between a distribution that is an RMD and one that is not.  All distributions totaling more than $10 for the year are required to be reported on a Form 1099-R.

"The distribution was effective the next day  December 30."  This implies that the distribution occurred in 2022, is reportable on a 2022 Form 1099-R and satisfies your 2022 RMD despite what the rep told you.  However, if the distribution is instead reported on a 2023 Form 1099-R, this would imply that the distribution was not effective on December 30.

[fanfare]

as a 2023 distribution.  It's still a distribution of your RMD, satisfying your RMD.

but it is also a missed distribution, requiring 2022 Form 5329.

You seem to be assuming this is the first RMD.

[RMDmissed2022]

Thanks all for the input.  Here is a recap and a few further details:

Distribution requested 12-29-22

Distribution effective and processed on 12-30-22  -  Custodian statement says: "Processed" means when amounts are credited or debited to an account. 

My 4th quarter Statement shows cash withdrawal of requested amount on 12-30-22

Distribution check was dated 1-3-23; I deposited it on 1-6-23

In a 45-minute call with custodian rep yesterday; the verdict was that a distribution must be processed AND CLEARED in 2022 to be considered a 2022 distribution.  

Does anyone know if this is consistent with IRS rules?  Is it debatable or appealable?

If it must be considered a 2023 withdrawal, I presume I must

• File Form 5329 to avoid 50% penalty
• Claim this distribution as income on next year's 1040, along with the RMD for 2023 and ...........
• Start requesting RMD's earlier!!

[dmertz]

It's up to the IRA custodian to establish their distribution procedures.  However, a distribution paid to you is "received" only when the funds become available to you, which if paid by check to you would be the date the check was available for pick-up.  Applying that same logic to a QCD, the distribution could not be "received" by the charity until the check is written.

Since this will be considered to be a late-taken RMD, you'll file 2022 Form 5329 Part IX requesting a waiver of the penalty.  Unless this distribution and any other QCDs you make in 2023 would total more than $100,000, you'll claim them all as QCDs on your 2023 tax return and they'll be nontaxable and excluded from your AGI.  Just because it's a late-taken RMD doesn't change the fact that it qualifies to be a QCD.