Do You Have to Take Your RMD in 2021?
WHAT ARE RMDs AND WHEN MUST YOU TAKE THEM?
An RMD (required minimum distribution) is the minimum amount you must withdraw from your retirement account in any RMD year. Although you can withdraw more than the minimum amount, you cannot take less. Taking less than the minimum amount will result in you owing the IRS a penalty.
With the new SECURE Act, which took effect in 2020, the age at which someone must take their RMDs increased from age 70 1/2 to age 72. IRA owners who reach age 70 1/2 after December 31, 2019 must begin their RMDs in the year they reach age 72. RMDs must be taken each year thereafter (except 2020).
In 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. A provision of this Act allowed IRA owners and defined contribution plan participants to avoid taking RMDs in 2020. This provision applied to all individuals, whether or not they were directly impacted by the coronavirus. Therefore, the CARES Act allowed you to skip taking your RMD in 2020.
DO YOU NEED TO TAKE YOUR RMD IN 2021?
Certain provisions of the CARES Act expired on December 31, 2020, including the temporary waiver of RMDs. If you had already started taking your RMDs prior to 2020, then you will need to resume taking your RMDs in 2021. If you will turn age 72 in 2021, then you will need to begin taking your RMDs in 2021.