Industry News

Recently, the Internal Revenue Service (IRS) released Announcement 2025-2 delaying the anticipated applicability date for upcoming final regulations related to required minimum distributions (RMDs) under Internal Revenue Code Section 401(a)(9). The U.S. Treasury Department and the IRS have indicated that certain portions of these future final regulations, which would finalize the proposed RMD regulations issued in July 2024 and were originally intended to apply as January 1, 2025, will apply no earlier than the 2026 distribution calendar year. This decision comes in response to concerns raised about the feasibility of implementing the new regulations in a timely manner.

Specifically, the announcement indicates that in response to commenters’ concerns, the provisions of future final regulations amending Treasury Regulations Sections 1.401(a)(9)-4, 1.401(a)(9)-5, and 1.401(a)(9)-6 that are to be issued for the proposed regulations are anticipated to apply beginning in the 2026 distribution calendar year.

The delay in the proposed effective date affects the following provisions of the 2024 Proposed Rule:

• Section 1.401(a)(9)-4: Proposed rules regarding the successor beneficiary of a surviving spouse;
• Section 1.401(a)(9)-5: Proposed rules regarding defined contribution plans, including:
• • The spousal election to have RMDs determined using the Uniform Lifetime Table;
  • Treatment of distributions from Roth contribution accounts (i.e., the requirement that Roth contributions and earnings are not subject to the RMD requirement);
  • Corrective distributions and the excise tax on RMD failures; and
• Section 1.401(a)(9)-6: Proposed rules that address the exception to the Qualified Domestic Relations Order (QDRO) requirements for qualified longevity annuity contracts.

For periods before the applicability date of these amendments, taxpayers are advised to apply a reasonable, good-faith interpretation of the statutory provisions related to the amendments.

IRS Announcement 2025-2 is available here.