IRS proposes new life expectancy tables for RMDs

Tax Hot Topics newsletter The IRS has issued proposed regulations that would update the life expectancy and distribution period tables used for determining required minimum distributions (RMDs) from qualified retirement plans, individual retirement accounts (IRAs), annuities, and other tax-favored employer-provided retirement arrangements. The proposed regulations would affect participants, beneficiaries, and plan administrators of qualified retirement plans and other retirement arrangements, as well as owners, beneficiaries, trustees, and custodians of IRAs and annuities.

An individual is generally required to receive RMDs beginning by April 1 following the year the recipient turns 70.5 years of age over a period not extending beyond the life expectancy of the individual and a designated beneficiary using the life expectancy tables and applicable distribution period tables under the existing regulations. To account for the increase in human life expectancies, the proposed regulations would adjust the life expectancy tables and applicable distribution period tables to reflect longer life expectancies. Accordingly, individuals with affected retirement plans would have the option to withdraw slightly smaller amounts from their plans each year, giving individuals and beneficiaries the option to leave amounts in their plan for a slightly longer period of time, in the event that they live longer.

The updated tables generally are proposed to be applicable for distribution calendar years beginning on or after Jan. 1, 2021. Comments on the proposed regulations are due Jan. 7, 2020.

Jeff Martin
Partner, Washington National Tax Office
T +1 202 521 1526

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