I have been receiving an inherited IRA since 2007 and never have pulled out money for an RMD for this account. Now I see that I needed to declare that money as an RMD. The previous years did not require an RMD to be shown separately, but was included in income. Is this a new law?
RMDs are ordinary distributions. If each year you received a distribution sufficient to cover the RMD for that year, there was nothing special to report. If you failed to complete an RMD, for the year, filing Form 5329 was required, but that simply meant telling TurboTax the amount of the RMD and the amount actually distributed. Because the SECURE 2.0 Act changed the requirements related to calculating the penalty for missed RMDs, questions were added beginning with 2024 TurboTax to determine if you properly completed the RMD and, if not, to determine the amount of the penalty.
RMDs are ordinary distributions. If each year you received a distribution sufficient to cover the RMD for that year, there was nothing special to report. If you failed to complete an RMD, for the year, filing Form 5329 was required, but that simply meant telling TurboTax the amount of the RMD and the amount actually distributed. Because the SECURE 2.0 Act changed the requirements related to calculating the penalty for missed RMDs, questions were added beginning with 2024 TurboTax to determine if you properly completed the RMD and, if not, to determine the amount of the penalty.