IRS Clarifies Required Minimum Distribution Reporting

March 8, 2023

The IRS recently issued Notice 2023-23, providing clarification to financial institutions on changes to reporting for required minimum distributions (RMDs) due to the SECURE 2.0 Act.

The SECURE 2.0 Act, enacted in December 2022 as Division T of the Consolidated Appropriations Act, 2023, P.L. 117-328, delayed the required beginning date for RMDs to age 73, permitting IRA owners who turn 72 in 2023 to not take an RMD for the year.

In recognition of the short amount of time financial institutions have had to change their systems for furnishing the RMD statement since the enactment of the SECURE 2.0 Act, relief is being provided by the notice with respect to this reporting. Under the relief, the IRS will not consider an RMD statement provided to an IRA owner who turns 72 in 2023 to have been provided incorrectly if the IRA owner is notified by the financial institution no later than April 28, 2023, that no RMD is required for 2023.

The SECURE 2.0 Act did not change the required beginning date for IRA owners who reached age 72 before Jan. 1, 2023. The IRS is encouraging all financial institutions to remind IRA owners who reached age 72 in 2022 they are still required to take those distributions by April 1, 2023.