Wouch Maloney - Certified Public Accounting Firm - Wednesday Wisdom

IRS Proposes New Rules for Required Minimum Distributions

Last month, the IRS proposed new rules related to Required Minimum Distributions (RMDs) from qualified plans, section 403(b) annuity contracts, custodial accounts, and retirement income accounts, as well as individual retirement accounts and annuities and eligible deferred compensation plans under section 457. The purpose of the proposed regulations is to update the regulations to reflect the amendments made by the Setting Every Community Up for Retirement Enhancement (SECURE) Act that was enacted in December 2019. At that time, we reported that the SECURE Act was widely considered to be the most significant retirement policy legislation since the Pension Protection Act of 2006.

Proposed Regulation Changes for 2022

The proposed regulations will affect administrators of, and participants in, those plans; owners of individual retirement accounts and annuities; employees for whom amounts are contributed to section 403(b) annuity contracts, custodial accounts, or retirement income accounts; and beneficiaries of those plans, contracts, accounts, and annuities.

Proposed changes include (but not limited to):

  • Statutory effective date of the limitation on beneficiary life expectancy distributions
  • Distribution requirements for participants in multiple plans
  • Distributions commencing during an employee’s lifetime (beginning dates)
  • Death of employee before required beginning date
  • New definition of eligible designated beneficiary
  • Revision of the definition of age of majority for the beneficiary
  • Definition of disability, specifically for beneficiaries under the age of 18
  • Retaining see-through trust concept and determining which see-through trust beneficiaries are treated as beneficiaries of the employee
  • Guidance on multi-beneficiary trusts
  • Determining RMD while the employee is alive: If employee’s sole beneficiary is their spouse who is more than 10 years younger than the employee, the Joint and Last Survivor Table will be used.
  • Actuarial increase for employees retiring after age 70 ½
  • Exclusion from income of amount rolled over

Public Comments Welcome

A public hearing on the proposed new rules is scheduled for June 15, 2022. Public comments may be submitted electronically on or before May 25, 2022.

Should the proposed regulations get approved later in 2022, we recommend you speak with your tax professional or financial advisor to determine if any of the new regulations pertain to your personal situation.


Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

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