Missed RMD Penalty: What It Costs and How to Fix It
Short answer: If you miss a required minimum distribution (RMD), the IRS excise tax is 25% of the amount you did not take, or 10% if you take it and file within the correction window (IRS, checked October 14, 2026). You still owe regular income tax on the money when it comes out. The IRS can waive the excise tax completely if the shortfall came from a reasonable error and you are fixing it. You ask for that on Form 5329 with a short letter of explanation.
What the missed RMD penalty is
Once you reach RMD age, you must take a minimum amount out of your traditional IRAs and most workplace plans each year. That age is 73 if you were born 1951 to 1959 and 75 if you were born in 1960 or later (IRS Pub. 590-B; RMD age by birth year).
If you take less than the required amount, the shortfall is subject to an excise tax of 25% (IRS Form 5329 instructions, 2025 edition, checked October 14, 2026). The rate drops to 10% if, during the correction window, you take out the missed amount and file a return that reports the tax.
The correction window ends on the earliest of three dates: the date the IRS mails a deficiency notice for this tax, the date the tax is assessed, or the last day of the second tax year after the year the tax applies to (IRS Form 5329 instructions). For an RMD missed in 2026, that last date is December 31, 2028, unless the IRS acts first. Waiting is the expensive choice.
Who is responsible for getting it right
You are. Your IRA custodian or plan may figure the amount for you, but the IRS says the account owner is responsible for taking the correct RMD on time (IRS, FAQ 6).
The rule covers traditional, SEP and SIMPLE IRAs, 401(k), 403(b) and 457(b) plans, and inherited accounts. Roth IRAs and Roth accounts inside a 401(k) or 403(b) have no RMDs while the owner is alive (IRS).
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Joe's RMD chain reaction
This is a hypothetical example using 2026 federal figures. Joe turns 73 in 2026. He is single and had $500,000 in a traditional IRA on December 31, 2025. He gets $30,000 a year from Social Security and $25,000 from a small pension and interest.
His 2026 RMD is $500,000 divided by 26.5, the Uniform Lifetime Table factor for age 73, which is $18,868 (IRS Pub. 590-B, Table III). Joe does not need the money, but the IRS still requires him to take it.
Now suppose Joe forgets. The excise tax is 25% of $18,868, which is $4,717. If he takes the money and files within the correction window, it is 10%, or $1,887. If the IRS grants a waiver, it is $0. In every case he still has to take the $18,868 and pay income tax on it.
That income tax is where the chain reaction starts. The withdrawal also makes more of his Social Security taxable, because the IRS formula counts half of his benefit plus his other income (IRS Pub. 915).
| Joe's 2026 return (hypothetical) | Without the RMD | With the RMD |
|---|---|---|
| Pension and interest | $25,000 | $25,000 |
| IRA withdrawal (RMD) | $0 | $18,868 |
| Taxable part of Social Security | $9,600 | $25,500 |
| Adjusted gross income | $34,600 | $69,368 |
| Federal income tax | $1,045 | $5,178 |
The math in words: $18,868 of IRA money pulled $15,900 more of his Social Security into taxable income ($25,500 minus $9,600). His federal tax rose by $4,133 ($5,178 minus $1,045). That is about 22 cents per RMD dollar, even though his top bracket is 12%. The figures use the 2026 standard deduction of $16,100, the $2,050 extra amount for age 65 and older (IRS), and the $6,000 senior deduction (IRS).
| If Joe misses the 2026 RMD | Excise tax | Income tax still owed on the $18,868 |
|---|---|---|
| Not fixed in the correction window | $4,717 (25%) | Yes, about $4,133 at Joe's 2026 rates |
| Fixed in the correction window | $1,887 (10%) | Yes |
| Waiver granted | $0 | Yes |
The third hand is Medicare. Joe's income stays under the first 2026 income-related monthly adjustment amount (IRMAA) line of $109,000 for a single filer (CMS). But if Joe had $80,000 of pension income instead of $25,000, the same RMD would move his modified adjusted gross income (MAGI) from $105,500 to $124,368, over that line. At 2026 rates, his Part B premium would go from $202.90 to $284.10 a month, plus a $14.50 Part D add-on: $95.70 a month more (CMS). IRMAA looks back two years, so the bill shows up two years after the withdrawal. One forced withdrawal, three hands in the pocket: the IRS, Social Security taxation, and Medicare.
How to fix a missed RMD, step by step
- Take the missed amount now. For IRAs, you figure the RMD for each IRA but can take the total from any of them. For 401(k) and 457(b) plans, each plan's RMD must come from that plan (IRS, FAQ 5).
- Take this year's RMD too if one is due. A missed amount does not replace the current year's requirement.
- File Form 5329 for the year the RMD was missed. Use that year's version of the form. The instructions explain when it goes with an amended return (Form 1040-X) and when it can be filed by itself (IRS Form 5329 instructions).
- Ask for the waiver on the form. Complete lines 52 and 53. On the dotted line next to line 54, write "RC" and the amount you want waived in parentheses. Subtract that amount, finish line 55, and pay any tax that remains (IRS Form 5329 instructions).
- Attach a letter of explanation. The IRS can waive the tax if the shortfall was due to reasonable error and you are taking reasonable steps to fix it (IRS, FAQ 9). Say what happened, when you found it, and the date you took the money. Keep copies.
The IRS reviews the request and notifies you if it is not granted. A tax professional can help with the form and the letter.
The first-year deadline and the two-RMD trap
Your first RMD is due by April 1 of the year after you reach RMD age. Every later one is due by December 31 (IRS). Missing April 1 is a missed RMD, with the same 25% tax.
Waiting until April 1 also means two RMDs in one tax year. If Joe delays his 2026 RMD of $18,868 to early 2027, he must also take his 2027 RMD by December 31, 2027. If his account grew 5% in 2026 to $525,000, that second RMD is $525,000 divided by 25.5, or $20,588. Together that is $39,456 of IRA income on one return. See RMD age and first-year timing for a full example.
Inherited IRAs: yearly RMDs now count
Many people who inherited an IRA from someone who died in 2020 or later must empty it within 10 years. If the owner died on or after the date their own RMDs had to start, most heirs must also take a yearly RMD in years 1 to 9 (IRS Pub. 590-B).
The IRS did not collect the excise tax on missed yearly amounts for 2021 to 2024, and said its final rules apply starting in 2025 (IRS Notice 2024-35). So a yearly RMD missed in 2025 or later can bring the 25% tax. The inherited IRA RMD calculator and the 10-year rule guide explain the details.
The still-working exception for 401(k) plans
If you still work, your employer's 401(k) or similar plan may let you delay RMDs from that plan until April 1 after the year you retire. This does not apply if you own more than 5% of the business, and the plan's own terms decide whether it is allowed (IRS).
The exception does not cover IRAs, including SEP and SIMPLE IRAs, and it does not cover a 401(k) from a past job. Those RMDs still start at your RMD age.
Common ways people miss an RMD
- Assuming the custodian would send it automatically.
- Taking an IRA RMD and thinking it also covers a 401(k). It does not.
- Forgetting the April 1 deadline in the first year.
- Using the wrong balance. The RMD uses the December 31 balance of the year before.
- Moving money between custodians late in the year and losing track of the amount.
- Not knowing an inherited IRA needs yearly withdrawals.
Two facts help with planning. Taking more than the RMD this year does not count toward next year, and an RMD cannot be rolled over into another tax-deferred account (IRS, FAQs 10 and 12). A qualified charitable distribution (QCD) counts toward your RMD (IRS Pub. 590-B). See how QCDs work.
These numbers change every year
The IRMAA brackets, the standard deduction and the senior deduction are all adjusted annually, and the 2027 figures are published late in 2026. The one exception is the Social Security taxation thresholds, which have not moved since 1983 and are not expected to.
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Check your RMD before the deadline
Enter your age and December 31 balance to see what you must take out this year.
Open the RMD calculator →Sources
- IRS: Retirement plan and IRA required minimum distributions FAQs (checked October 14, 2026)
- IRS: Instructions for Form 5329 (2025), Part IX, correction window and waiver (checked October 14, 2026)
- IRS: Retirement topics, required minimum distributions (checked October 14, 2026)
- IRS: Publication 590-B (2025), Distributions from IRAs, Table III (checked October 14, 2026)
- IRS: Notice 2024-35, certain required minimum distributions for 2024 (checked October 14, 2026)
- IRS: Publication 915, Social Security benefits (checked October 14, 2026)
- IRS: Tax inflation adjustments for tax year 2026 (checked October 14, 2026)
- CMS: 2026 Medicare Parts A and B premiums and deductibles (checked October 14, 2026)
Frequently asked questions
What is the penalty for missing an RMD in 2026?
The IRS excise tax is 25% of the amount you should have taken but did not. It drops to 10% if you take the missed amount and file a return reporting the tax within the correction window. You also owe regular income tax on the withdrawal.
Can the IRS waive the missed RMD penalty?
Yes. The IRS can waive part or all of the excise tax if the shortfall was due to reasonable error and you are taking reasonable steps to fix it. You request it on Form 5329 by writing RC and the amount next to line 54 and attaching a letter of explanation.
Do I need to file Form 5329 if I missed my RMD?
Generally yes. The IRS says the account owner should file Form 5329 for the year the RMD was required but not taken, whether you owe the tax or are asking for a waiver.
What should I do if I forgot to take my RMD last year?
Take the missed amount as soon as you can, take this year's RMD on time, and file last year's version of Form 5329. A tax professional can help you decide whether to request a waiver and how to file it.
Is there a penalty if I miss the April 1 deadline for my first RMD?
Yes. The first RMD is due by April 1 of the year after you reach RMD age, and missing that date is treated like any other missed RMD.
Does the missed RMD penalty apply to inherited IRAs?
Yes. The IRS waived the tax on missed yearly inherited IRA RMDs for 2021 to 2024, but its final rules apply starting in 2025, so missed amounts from 2025 on can be taxed.
Want to run these numbers for your own situation?
The Retirement Literacy Foundation runs free retirement classes on Social Security timing, taxes in retirement, and how to turn savings into income. No products are sold at our classes.
The Retirement Literacy Foundation is a 501(c)(3) nonprofit. This guide is general education, not individualized tax, legal or investment advice. Rules change with legislation and IRS and SSA guidance, and the right move depends on your situation. Check anything you plan to act on with SSA, the IRS or a qualified tax professional.
Hans Goldstein, EA
Founder & Executive Director · Retirement Literacy Foundation, a 501(c)(3) non-profit
Admitted to practice before the IRS
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