If I have AML Acute Myeloid Leukemia, is that considered a permanently disability for RMD purposes?

[RobertB4444]

Yes, an AML diagnosis qualifies as a disability for all purposes for at least 24 months from diagnosis.

Here is information from the IRS on what will allow you to take an RMD (including a chronic illness)

Here is the federal government list of chronic illnesses.

@tfbowie

Edited  01/26/2023

[Opus 17]

Disabled means that you are unable to perform gainful work due to a condition that is permanent, or will last at least one year, or is reasonably foreseeable to lead to death. The key here seems to be “gainful work.“   Does your condition prevent you from working?

[Edited]

If you are asking about a waiver for the penalty for not taking an RMD, see below.  It was not clear what you are asking. 

[Opus 17]

what do you mean, RMD purposes?

An RMD is the minimum amount you must withdraw after age 72-1/2, based on your life expectancy and the account balance.  There are no exceptions to the requirement to withdraw at least the minimum amount.  If you miss the December 31 deadline, you can take the RMD as soon as you remember and ask the IRS to waive the penalty.  If you are asking, "Can I ask for a waiver because I forgot my RMD because I was distracted by illness", then yes, you can use your diagnosis to request a waiver.  Most waivers are granted as long as you have any reasonable sounding explanation.

Do you mean the 10% penalty for early withdrawal before age 59-1/2?  Disability is a reason to be exempt from the penalty, but for the IRS, disabled means unable to perform gainful work.  Many people with medically recognized disabilities are able to work (blind, amputee, etc.).  So the question really should be, are you unable to work because of your diagnosis, and that inability to work is expected to last at least one year.

[Anonymous]

deleted

[Opus 17]

@Anonymous 

No, there is no exception in the law, regulations or publication 590-B for additional tax for missing an RMD.  However, the IRS may grant a waiver for "reasonable cause", including illness.  Which is what I wrote.  

Here is the law.

https://www.law.cornell.edu/uscode/text/26/4974

An exception is something written into the law.  It's automatic, the law is whatever the law says.  For example, the law says you don't pay the 10% penalty on early withdrawals if you meet a certain definition of disabled.  There's no discretion involved and you don't have to ask, you just follow the law.

A waiver is discretionary administrative relief.  Although the ability to grant waivers must be authorized in the law ("the Secretary may waive the tax"), it is not guaranteed, and depends on the discretion of the person reviewing the form and the overall position of the IRS.  Recently, the IRS has been generous about granting waivers of the penalty, but this is not permanent or guaranteed, it can be changed at any time.  For example, if the president appointed a new commissioner of the IRS who wanted to squeeze every dollar out of every taxpayer, they could change the policy and start refusing to grant waivers of the tax for missing an RMD.  The law says the IRS may waive the penalty, it does not say the IRS must waive the penalty.  On the other hand, the IRS can't change the exception to the 10% penalty for early withdrawal for people who meet a certain definition of disabled, because that is written into the law and only Congress can change it. 

As I said, a person can use illness as reasonable cause to request a waiver.  That is not the same as an exception. 

[Anonymous]

deleted

[Opus 17]

@Anonymous 

Are you talking about the eligible designated beneficiary rule?

Eligible designated beneficiaries.

An IRA beneficiary is an eligible designated beneficiary if the beneficiary is the owner's surviving spouse, the owner's minor child, a disabled individual, a chronically ill individual, or any other individual who is not more than 10 years younger than the IRA owner.

That doesn't mean the person is exempt from RMDs, that means the person is allowed to stretch the IRA over their lifetime instead of having to close it out within 10 years.  It changes the size of the RMD, but not the requirement to take one.

Other than that, I have reviewed both the SECURE Act and SECURE Act 2.0 and the only changes I see to RMDs are the raising of the beginning date and the reducing of the penalty for missing one.  If I have missed a change that excuses RMDs with no penalty, I would be happy for you to point it out. 

SECURE 2.0, starts on page 817

https://www.congress.gov/117/bills/hr2617/BILLS-117hr2617enr.pdf

SECURE Act, starts on page 605

https://www.govinfo.gov/content/pkg/PLAW-116publ94/pdf/PLAW-116publ94.pdf

[Anonymous]

OMG @Opus 17  shut UP already

and take a class in contextual clues   This person is asking about a question they see in a software program and the program (apparently) and the IRS taxpayer facing materials use the doggone word exception - as in an exception to whatever the usual rules are.   I did initially mis-state a key important factor, so I have deleted those messages so as not to confuse people but the IRS uses the word "exception" here, the software seems to ask the question in that way, too, and you're information isn't appropriate here or needed.