Required Minimum Distributions: 2026 Rules Every CPA Should Know

6/2/2026

Required minimum distributions have become one of the least safe areas in tax practice to rely on memory for. The rules were amended, then amended again, the regulations were finalized after years of uncertainty, relief was granted for distributions missed during that uncertainty, and the beneficiary regime was rebuilt in a way that made a great deal of prior planning obsolete.

Which means the useful thing this post can do is teach the structure — which is stable — and be explicit about which specifics have to be looked up every year. Any practitioner working from what they knew three years ago is working from something that has changed.

What Is Stable

Who must take a distribution

The owner of a tax-deferred retirement account must begin taking distributions once they reach the applicable age. That age has been raised twice and is scheduled to change again, so it must be confirmed for the specific client's year of birth — this is the single most common source of error right now, because different clients are subject to different ages.

Employer plans have a still-working exception that individual retirement accounts do not: a participant still employed by the plan sponsor may generally defer distributions from that plan until retirement. Two limitations matter. It does not apply to a five percent owner, which excludes most closely held business owners — the group most likely to ask about it. And it applies plan by plan, not to accounts left with former employers.

Roth treatment differs, and the treatment of designated Roth accounts within employer plans changed. Confirm the current position rather than assuming the historical distinction between Roth IRAs and Roth employer accounts still holds.

How the amount is calculated

The prior December 31 account balance, divided by a life expectancy factor from the applicable table.

Which table applies is where errors occur:

The uniform lifetime table for most account owners.

A joint life table where the sole beneficiary is a spouse more than ten years younger, which produces a smaller required distribution and is regularly overlooked.

A single life table for beneficiaries taking distributions over life expectancy.

Two mechanical points. The prior year-end balance is the input, so a distribution taken this year does not reduce this year's requirement. And an outstanding rollover in transit at year end must be included in the balance, which is missed when a rollover straddles the year.

The aggregation rule practitioners get wrong

Structural, stable, and a recurring error:

Individual retirement accounts may be aggregated. Compute the requirement for each, total them, and satisfy the total from any one or combination of them.

403(b) accounts may be aggregated among themselves, separately from IRAs.

Qualified employer plans may not be aggregated. Each plan must distribute its own required amount. A client with two former employers' plans must take a distribution from each — and cannot satisfy one plan's requirement out of another, or out of an IRA.

That last point produces real shortfalls, because clients with several accounts naturally assume the total is what matters.

The first year and the deferral trap

A first required distribution may generally be deferred to April 1 of the following year. Doing so means two distributions fall in the same calendar year — the deferred first one and the second year's, due by December 31.

That is frequently a poor outcome: two distributions stacked into one year can push income into a higher bracket, affect the taxation of Social Security benefits, and increase income-related premium adjustments. The default advice should be to take the first distribution in the first year, with the deferral reserved for a client with a specific reason — a low-income year, or a large deductible event.

The Beneficiary Rules: Where Everything Changed

The area requiring the most care, because the regime was rebuilt and much of what practitioners internalized no longer applies.

Eligible designated beneficiaries may generally use a life expectancy method. The categories are defined and narrow: a surviving spouse; a minor child of the account owner — a child, not a grandchild, and only until reaching majority, after which a ten-year period generally begins; a beneficiary who is disabled or chronically ill as defined; and a beneficiary not more than ten years younger than the account owner.

Everyone else who is a designated beneficiary is subject to a ten-year rule — the account must be emptied by the end of the tenth year following the year of death. This is what replaced the ability of adult children to stretch distributions across their own lifetimes, and it is the change with the largest planning consequences.

The question that caused years of confusion — whether annual distributions are also required during the ten-year period, or whether the beneficiary may wait and take everything in year ten — turned on whether the owner died before or after their required beginning date. This was unresolved for an extended period, relief was granted for distributions not taken during the uncertainty, and it has since been addressed in final regulations. Confirm the current position and the status of any remaining relief, because the answer determines whether a beneficiary who took nothing has a problem.

Non-designated beneficiaries — an estate, a charity, or a trust that does not qualify as a see-through trust — are subject to a shorter period, which differs depending on whether death occurred before or after the required beginning date.

Successor beneficiaries — the person who inherits from the original beneficiary — have their own treatment, and it is generally less favorable than clients expect.

Surviving spouses have elections unavailable to anyone else, including treating the account as their own, and the choice among them is a real planning decision with different consequences for timing, beneficiary designation, and access before retirement age.

Trusts Named Before the Rules Moved

A planning point worth raising with every client whose beneficiary is a trust, because it produces bad outcomes silently.

For a trust to allow distributions based on a beneficiary's life expectancy, it must satisfy see-through requirements. Beyond that, the distinction between a conduit trust — which must pass distributions out to the beneficiary — and an accumulation trust — which may retain them — determines both the payout period and who is taxed.

The problem: a great many trusts were drafted when adult children could stretch distributions over decades. A conduit trust drafted on that assumption, now subject to a ten-year rule, will be forced to distribute the entire account to the beneficiary within ten years — defeating the protective purpose the trust existed for. An accumulation trust retains the funds and pays tax at compressed trust rates.

Neither outcome is what the client intended when the document was drafted. Every client with a trust named as a retirement account beneficiary should have that designation reviewed, and the review is a conversation with the drafting attorney rather than an accounting exercise.

The Penalty, and the Correction

A shortfall attracts an excise tax on the amount not distributed. The rate was reduced by recent legislation, and a further reduction is available where the shortfall is corrected within a defined window — which makes prompt correction materially valuable rather than merely advisable.

A waiver may be requested where the shortfall was due to reasonable error and reasonable steps are being taken to remedy it. The procedure involves filing the applicable form with a statement of the facts, and — the practical point — taking the missed distribution before or with the request, because a request unaccompanied by correction is weak.

Confirm the current rates, the correction window, and the waiver procedure before advising a client, since all three have moved.

Planning, in Order of Value

Qualified charitable distributions. For a charitable client, the best tool in this area by a wide margin. A distribution paid directly from an IRA to a qualifying charity, available from a specified age and subject to an annual limit, is excluded from income and can satisfy the required distribution. That beats taking the distribution into income and claiming a deduction, particularly for a client who does not itemize — and it also reduces the income that drives other thresholds. Confirm the age, the limit, and the eligible recipient rules, and note the mechanics: it must go directly to the charity, and the timing relative to the year's distribution matters.

The conversion window. The period between retirement and the required beginning date is frequently a client's lowest-income stretch, and it is the natural window for Roth conversions — reducing the balance that will later drive required distributions, and moving assets into a form that does not require them during the owner's life. This window closes, and clients who did not use it discover their required distributions are larger than they need.

Take the first distribution in the first year, per above.

Withholding from the distribution. Federal income tax withheld from a retirement distribution is treated more favorably than a late estimated payment in some circumstances, which makes a large year-end distribution a useful vehicle for covering a shortfall elsewhere in the client's return.

In-kind distributions. A required distribution can be satisfied by distributing securities rather than cash, which avoids selling in a poor market. The amount is the fair market value on the distribution date, and the client's basis resets.

Beneficiary designations reviewed — on every account, after every life event, and specifically since the beneficiary rules changed. This is the cheapest and most neglected planning act available, and a stale designation overrides every estate document.

Structured coverage is available through the Required Minimum Distributions Training and Certification Program, IRA Essentials, IRA Fundamentals, the retirement plan administration catalog, the Retirement Tax Guide, HS 326: Planning for Retirement Needs, and Wills, Trusts, and Estate Administration.

The Annual Process

A checklist worth running for every affected client, in the autumn rather than in December:

Identify every account, including those the client forgot — former employers' plans especially, since each qualified plan must distribute its own amount.

Confirm the applicable age for this client's birth year, rather than applying a remembered figure.

Obtain the prior December 31 balance for each account, including any rollover in transit.

Confirm which table applies, checking specifically whether a spouse more than ten years younger is the sole beneficiary.

Compute per account, then apply the aggregation rules correctly.

Confirm what has already been distributed this year, which requires asking rather than assuming — clients take distributions the practitioner does not know about.

Check for inherited accounts, which have their own computation and their own rules, and which clients frequently do not mention because they do not think of them as theirs.

Consider a qualified charitable distribution before the distribution is taken, since the ordering matters.

Confirm withholding and how it fits the client's overall estimated payment position.

Verify completion before year end, with the confirmation in the file — not in January.

Review beneficiary designations while you have the account list in front of you.

Where This Goes Wrong

Applying one age to every client, when the applicable age depends on birth year
Aggregating qualified plans, which is not permitted — each pays its own
Forgetting a former employer's plan
Using the current balance rather than the prior year-end balance
Omitting a rollover in transit at year end
Missing the joint life table where a spouse is more than ten years younger
Deferring the first distribution into the following year without modeling the two-distribution effect
Applying the still-working exception to a five percent owner or to a former employer's plan
Assuming the old stretch rules for a non-spouse beneficiary
A conduit trust drafted for a stretch now forced to distribute within ten years
Inherited accounts overlooked, because the client did not mention them
Taking the distribution and then claiming a charitable deduction, instead of using a qualified charitable distribution
Requesting a penalty waiver without having taken the missed distribution
Confirming completion in January, when nothing can be fixed
Relying on knowledge from before the amendments, in an area amended twice

The honest summary for a practitioner: get the structure right — accounts identified, aggregation applied correctly, the right table, the prior year-end balance — and look up every number every year, because this is the area where a confident memory is most likely to be wrong and where the client's penalty is the consequence.

Frequently Asked Questions

Can required distributions from multiple accounts be combined?

It depends on the account type, and this is a recurring error. Individual retirement accounts may be aggregated — compute each, total them, and satisfy the total from any combination. 403(b) accounts may be aggregated among themselves. Qualified employer plans may not be aggregated: each plan must distribute its own required amount, and it cannot be satisfied from another plan or from an IRA.

Should a client defer their first distribution to the following April?

Usually not. Deferring means two distributions fall in the same calendar year, which can push income into a higher bracket, affect the taxation of Social Security benefits, and increase income-related premium adjustments. The default should be taking the first distribution in the first year, with deferral reserved for a client with a specific reason such as an unusually low-income year.

Does the still-working exception help a business owner?

Generally no. The exception permits a participant still employed by the plan sponsor to defer distributions from that plan, but it does not apply to a five percent owner — which excludes most closely held business owners, the group most likely to ask about it. It also applies plan by plan and not to accounts left with former employers.

What changed for non-spouse beneficiaries?

Most designated beneficiaries who are not eligible designated beneficiaries are now subject to a ten-year rule, replacing the ability of adult children to stretch distributions over their own life expectancy. Whether annual distributions are also required within those ten years turned on whether the owner died before or after their required beginning date, was unresolved for years with relief granted for missed distributions, and has since been addressed — so the current position must be confirmed.

Why should trusts named as retirement account beneficiaries be reviewed?

Because many were drafted when a stretch over decades was available. A conduit trust drafted on that assumption, now subject to a ten-year rule, will be forced to distribute the whole account to the beneficiary within ten years — defeating the protection the trust existed to provide. An accumulation trust instead retains the funds and pays tax at compressed trust rates. Neither is what the client intended.

What is the best planning tool in this area?

A qualified charitable distribution for a charitable client — paid directly from an IRA to a qualifying charity, excluded from income, and capable of satisfying the required distribution. It beats taking the distribution into income and claiming a deduction, especially for a client who does not itemize, and it reduces the income that drives other thresholds. The age, limit, eligible recipients, and ordering mechanics should all be confirmed.