IRS Announces Delayed Applicability Date for Future RMD Final Regulations

(Parker Tax Publishing March 2026)

The IRS announced that it anticipates that certain portions of final regulations relating to required minimum distributions (RMDs) under Code Sec. 401(a)(9) will apply for the distribution calendar year that begins no earlier than 6 months after the date that final regulations are issued in the Federal Register. In the interim, the Announcement states that taxpayers must continue to apply a reasonable, good-faith interpretation of the statutory provisions underlying the regulations. Announcement 2026-7.

Background

Code Sec. 401(a)(9) requires a stock bonus, pension, or profit-sharing plan described in Code Sec. 401(a) (or an annuity contract described in Code Sec. 403(a)) to make minimum distributions starting by the required beginning date (as well as minimum distributions to beneficiaries if the employee dies before the required beginning date) (RMDs). Individual retirement accounts and individual retirement annuities described in Code Sec. 408(a) and (b), respectively, annuity contracts, custodial accounts, and retirement income accounts described in Code Sec. 403(b), and eligible deferred compensation plans under Code Sec. 457(b) are also subject to the rules of Code Sec. 401(a)(9) pursuant to Code Sec. 408(a)(6) and (b)(3), 403(b)(10), and 457(d)(2), respectively, and the regulations under those sections.

In 2022, the IRS published proposed regulations in REG-105954-20 regarding RMDs under Code Sec. 401(a)(9) and related provisions. The 2022 proposed regulations reflected changes made by the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), enacted as part of the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-94), and also included a comprehensive update and restatement of the regulations under Code Sec. 401(a)(9). After the 2022 proposed regulations were issued, the SECURE 2.0 Act of 2022 (SECURE 2.0 Act) was enacted as part of the Consolidated Appropriations Act, 2023 (Pub. L. 117-328). The SECURE 2.0 Act included a number of provisions relating to RMDs.

After considering the comments received in response to the 2022 proposed regulations and reviewing the changes made in the SECURE 2.0 Act, the IRS determined that certain of those changes could be included in final regulations, but that other changes should be addressed in new proposed regulations. Accordingly, in 2024 the IRS published final regulations regarding RMDs under Code Sec. 401(a)(9) and related provisions in T.D. 10001, and also published proposed regulations under Code Sec. 401(a)(9) in REG-103529-23 (2024 proposed regulations).

With the exception of Prop. Reg. Sec. 1.401(a)(9)-5(a)(5)(v) (relating to the valuation of an annuity contract under the partial annuitization option provided for in Section 204 of the SECURE 2.0 Act), the provisions of the 2024 proposed regulations were proposed to apply for purposes of determining RMDs for calendar years beginning on or after January 1, 2025 (so that they would begin to apply at the same time as the 2024 final regulations).

According to the IRS, commenters raised issues regarding some of the provisions of the proposed regulations. Commenters were also concerned that it would be difficult to implement many of the provisions of the future final regulations in a timely manner if the January 1, 2025, applicability date set forth in the 2024 proposed regulations were to be retained in the final regulations. Commenters said that this difficulty arises from the expected timing of the future final regulations along with the uncertainty regarding the resolution of issues commenters raised. Commenters expressed specific concerns with the challenges of implementing the final regulations to be adopted pursuant to the proposed amendments to Reg. Secs. 1.401(a)(9)-4, 1.401(a)(9)-5, and 1.401(a)(9)-6.

In response to comments received on the proposed regulations, the IRS issued Announcement 2025-2, which provides that the final regulations amending Reg. Secs. 1.401(a)(9)-4, 1.401(a)(9)-5, and 1.401(a)(9)-6 are anticipated to apply no earlier than the 2026 distribution calendar year. In the interim, the Announcement stated that taxpayers must apply a reasonable, good-faith interpretation of the statutory provisions underlying the amendments.

Anticipated Applicability Date of Future Final Regulations

Final regulations amending Reg. Secs. 1.401(a)(9)-4, 1.401(a)(9)-5, and 1.401(a)(9)-6, issued pursuant to the 2024 proposed regulations, are anticipated to apply for purposes of determining required minimum distributions for the distribution calendar year that begins no earlier than 6 months after the date that final regulations are issued in the Federal Register. For periods before the applicability date of these regulations, taxpayers must continue to apply a reasonable, good-faith interpretation of the statutory provisions underlying the regulations.

For a discussion of RMDs, see Parker Tax ¶131,506 (qualified retirement plans) and ¶134,570 (IRAs).

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