Required Minimum Distributions and changes for 2020

In most cases, taxpayers who turned 70½ during 2019 must start receiving required minimum distributions (RMD) from individual retirement accounts (IRAs) and workplace retirement plans by April 1.

The April 1 deadline applies to owners of traditional IRAs, but not Roth IRAs. Normally, it also applies to retired participants in various workplace retirement plans including 401(k), 403(b) and 457 plans. The special April 1 deadline only applies to the required distribution for the first year. Additionally, for this year and all subsequent years, the RMD must be made by Dec. 31.

If the taxpayer doesn’t take any distributions, or if the distributions are not large enough, there may be a 50% tax on the amount not withdrawn.

Just a reminder, that with the new SECURE Act, the age requirement for RMDs got bumped up from 70½ to 72. So, if you reach age 70½ in 2020, you don’t have to take an RMD until you reach age 72.