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helen-shing-yaho
New Member

I missed a RMD on 2021 tax return , i did not get federal tax reund yet , how shall I amend? amend ?

refund mot reund
3 Replies
Mike9241
Level 15

I missed a RMD on 2021 tax return , i did not get federal tax reund yet , how shall I amend? amend ?

There is a 50% penalty assessed on the amount of the RMD that is not taken by the deadline. For example, if you failed to take your $10,000 RMD for 2021, you would be subject to a $5,000 penalty in addition to your RMD being taxable for the year. If you missed your RMD, the IRS can waive the 50% penalty for good cause. Here are the steps you will need to take to have the penalty waived:

Take the RMD. To have the 50% penalty waived by the IRS, you must correct your error. You must take the RMD amount that was not taken in 2021.

If you do want to pay the penalty take the RMD ASAP and it’s best to take it as a separate distribution.

After taking the RMD, file Form 5329 for 2021

https://www.irs.gov/pub/irs-pdf/f5329.pdf 

The following steps are from the 2021 Form 5329:

Line 52: Minimum required distribution
On this line, indicate the total amount of the RMD. Only include the total for the accounts that had a shortfall.

Line 53: Amount actually distributed
List the amount that was taken. If nothing was taken, enter zero.

Line 54: Subtract line 53 from line 52
When seeking a waiver of the penalty, enter a zero on this line. To the left of the line, write “RC” (abbreviation for reasonable cause). Beside RC, write the amount of the RMD shortfall.

Line 55: Additional tax. Enter 50% of line 54
When seeking a penalty waiver, this line will also be zero. Even if the taxpayer does not receive a waiver, they are not required to pay the penalty in advance.

Write a letter of explanation stating your case for why the IRA should waive the penalty. The letter should be brief and cover the relevant points:
The reason the RMD was missed
The fact that the RMD has now been taken
The steps you’ve taken to ensure future RMDs are made on time

Mail the completed form(s) to the IRS as a standalone form, along with the letter of explanation, and be sure to sign the form.

see  page 114 of 1040 instructions for where to file 

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf 

Note: There is no need to file a 1040X to amend your taxes for the year the RMD was supposed to be taken. Tax on the amount taken to correct the missed RMD will be due in the year the funds are distributed. if the form is filed without payment of the 50% penalty and the IRS later determines that the penalty is owed, you could also owe interest on the penalty amount. Form 5329 must be filed to start the IRS statute of limitations clock.

 

helen-shing-yaho
New Member

I missed a RMD on 2021 tax return , i did not get federal tax reund yet , how shall I amend? amend ?

Hi. Thank you very much for your reply.

I actually got the RMD on December 6, 2021, the 1099R came in very late

so, i didn't see it when I was doing my income tax. I had to use paper file the tax, 

my federal tax still pending until at least October. 

Shall I send the amend tax to IRS or waiting IRS to response? or any other form?

Please advise. 

Thanks again!

Best regards,

Helen

 

 

Critter-3
Level 15

I missed a RMD on 2021 tax return , i did not get federal tax reund yet , how shall I amend? amend ?

Ok ... you should  WAIT for the IRS to fully process the paper return and send the original refund BEFORE you send in an amended return which will also need to be paper filed.  

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