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eyorty
New Member

Will I owe a penalty since I turned 70 1/2 in February 2017, but did not take my RMD until mid-April 2017? If so, how can I request a waiver due to my mistake?

I turned 70 at the end of August 2016, so 70 1/2 near end of February 2017.  Is the RMD required by April 1 of 2017, or by end of 2017?  If it is required by April 1, 2017, and I take it now (mid-April), I would want to request a waiver of the penalty caused by my misunderstanding.  If necessary, how would I go about that?

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Accepted Solutions
RichardG
New Member

Will I owe a penalty since I turned 70 1/2 in February 2017, but did not take my RMD until mid-April 2017? If so, how can I request a waiver due to my mistake?

Your first required minimum distribution must be taken by April 1 of the year following the calendar year in which you reach age 70½.  Since you reached age 70 1/2 in 2017, you have until April 1, 2018 to take the first distribution.  

Keep in mind that if you wait until 2018 to take the first distribution, you'll be required to take a second RMD for 2018, so it may be preferable to take the first RMD in 2017.  The IRS explains:

The first year following the year you reach age 70½ you will generally have two required distribution dates: an April 1 withdrawal (for the year you turn 70½), and an additional withdrawal by December 31 (for the year following the year you turn 70½). To avoid having both of these amounts included in your income for the same year, you can make your first withdrawal by December 31 of the year you turn 70½ instead of waiting until April 1 of the following year.

Example: John reached age 70½ on August 20, 2013. He must receive his 2013 required minimum distribution by April 1, 2014, based on his 2012 year-end balance. John must receive his 2014 required minimum distribution by December 31, 2014, based on his 2013 year-end balance.

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1 Reply
RichardG
New Member

Will I owe a penalty since I turned 70 1/2 in February 2017, but did not take my RMD until mid-April 2017? If so, how can I request a waiver due to my mistake?

Your first required minimum distribution must be taken by April 1 of the year following the calendar year in which you reach age 70½.  Since you reached age 70 1/2 in 2017, you have until April 1, 2018 to take the first distribution.  

Keep in mind that if you wait until 2018 to take the first distribution, you'll be required to take a second RMD for 2018, so it may be preferable to take the first RMD in 2017.  The IRS explains:

The first year following the year you reach age 70½ you will generally have two required distribution dates: an April 1 withdrawal (for the year you turn 70½), and an additional withdrawal by December 31 (for the year following the year you turn 70½). To avoid having both of these amounts included in your income for the same year, you can make your first withdrawal by December 31 of the year you turn 70½ instead of waiting until April 1 of the following year.

Example: John reached age 70½ on August 20, 2013. He must receive his 2013 required minimum distribution by April 1, 2014, based on his 2012 year-end balance. John must receive his 2014 required minimum distribution by December 31, 2014, based on his 2013 year-end balance.

View solution in original post

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