What Happens If I Miss My RMD Deadline?

Once you reach RMD age, the IRS expects you to take a required minimum distribution from your traditional retirement accounts by December 31 each year. (Your very first RMD has a one-time extension to April 1 of the following year.)

But life happens. Maybe you lost track of the date, didn’t realize an account required a distribution, or your IRA holds a property with no cash on hand. If you’ve missed an RMD, or you’re worried you might, here’s what to know and what to do next.

The Penalty for Missing an RMD

If you don’t withdraw your full RMD by the deadline, the IRS can impose an excise tax of 25% of the amount you should have withdrawn but didn’t.

The good news is that the penalty is lower than it used to be. Before the SECURE 2.0 Act, it was 50%.

How to Reduce the Penalty to 10%

If you correct the mistake within the IRS correction window, the penalty drops from 25% to 10%.

The correction window generally runs through the end of the second year after the year you missed the RMD, unless the IRS sends you a notice or assesses the tax first. For example, if you missed your 2026 RMD, you would generally have until December 31, 2028 to correct it and qualify for the reduced penalty.

Here’s how that looks in dollars. Say your RMD was $12,000 and you didn’t withdraw anything by December 31.

At the full 25% rate, the penalty would be $3,000.
If you correct it within the correction window, the penalty would be $1,200.

The sooner you correct it, the better. Waiting until the end of the window only risks the IRS acting first.

You May Be Able to Have the Penalty Waived

In some cases, the IRS may waive the penalty entirely. If you missed your RMD due to a reasonable error, such as an illness, a custodian mistake, or a misunderstanding of the rules, and you’re taking steps to fix it, you can request a waiver when you file IRS Form 5329 with your tax return, along with a short explanation.

A waiver isn’t guaranteed, but it’s worth discussing with your tax advisor.

Can I Just Catch Up Next Year?

You do need to catch up, but taking extra next year doesn’t erase the penalty on its own. The missed RMD still counts as missed for the year it was due.

That’s why the right move is to withdraw the missed amount as soon as you notice, rather than waiting for your next regular RMD. Keep in mind that if you take a missed RMD in a later year, you’ll also need to take that year’s RMD, and both will count as taxable income in the year you withdraw them.

Why Self-Directed Investors Sometimes Miss RMDs

Self-directed IRA holders face a few extra challenges:

Illiquid assets. When your IRA owns real estate or notes, there may not be cash available when the RMD comes due.
Late valuations. Your RMD depends on your December 31 value, and alternative assets need a valuation from you before the number can be calculated.
Multiple account types. IRAs can be combined for RMD purposes, but 401(k)s, including solo 401(k)s, must each satisfy their own RMD.
Inherited IRAs. Many beneficiaries now need to take annual RMDs under the 10-year rule, and penalty relief for missed inherited distributions ended after 2024.

Planning ahead with a cash cushion, current valuations, and a clear distribution plan can prevent most of these issues.

What to Do If You Already Missed One

Take the missed distribution as soon as possible.
Contact your tax advisor.
File IRS Form 5329 with your tax return to report the missed RMD and, if eligible, request a waiver.
Put a plan in place so it doesn’t happen again next year.

How MidAtlantic IRA Helps You Stay on Track

We know RMDs are one more thing to keep track of, so we do our part to make it easier:

Annual RMD calculations. We calculate your required withdrawal each year based on your account’s year-end value and your age.
Client reminders. We send reminders well before the IRS deadline.
Our internal cutoff date: [November 15]. We strongly encourage you to request your RMD by this date so it can be processed before year end and to avoid late processing fees.
Dedicated support. Our team is happy to answer questions and walk you through the process.

Because every situation is different, we always recommend working with your CPA or tax advisor, especially if you’ve missed an RMD. MidAtlantic IRA doesn’t provide tax, legal, or investment advice, but we’re here to help you get back on track.

Worried you’ve missed an RMD, or want to make sure you don’t? Schedule a call with our team and we’ll help you figure out next steps.