Missed Your RMD? Penalty, Correction Window, and How to Get It Waived (2026)

The penalty for a missed Required Minimum Distribution is 25% of the shortfall — serious money if you have a large balance. But SECURE Act 2.0 created a Correction Window that reduces the penalty to 10% if you act quickly, and the IRS has a long track record of waiving the penalty entirely for taxpayers who take the missed distribution and attach a reasonable cause explanation. This guide covers the exact rules for 2026.

The 2026 penalty: 25% — down from 50%

Before SECURE Act 2.0, missing an RMD triggered a 50% excise tax on the shortfall — the amount you should have withdrawn but didn't. That was one of the steepest penalties in the tax code. Section 302 of SECURE 2.0 reduced it to 25% of the shortfall for tax years after December 31, 2022.¹

On a $100,000 missed RMD, the penalty is now $25,000 rather than $50,000. Still painful, but the bigger change is what SECURE 2.0 did to the correction process.

The Correction Window: 10% if you fix it in time

SECURE Act 2.0 created a formal "Correction Window" — a period during which you can take the missed distribution, file the required forms, and pay only 10% excise tax instead of 25%.¹

The Correction Window closes on the earliest of three events:

1. The last day of the second taxable year after the year the RMD was missed
2. The date the IRS mails you a notice of deficiency for the penalty
3. The date the IRS formally assesses the excise tax

In practice, that means the two-year clock usually controls:

The 10% corrected rate is automatic — no discretion on the IRS's part. As long as you take the missing distribution and file Form 5329 within the Correction Window, you qualify. That said, many taxpayers qualify for a full waiver (see below), making even the 10% unnecessary.

Step-by-step: How to fix a missed RMD

Step 1: Calculate the shortfall

Determine exactly how much you were supposed to withdraw but didn't. Use your December 31 account balance from the prior year divided by the applicable IRS life expectancy divisor from the Uniform Lifetime Table (or Joint Life Table if your spouse is the sole beneficiary and more than 10 years younger). Our RMD Calculator can help you verify the number.

Step 2: Take the corrective distribution immediately

Withdraw the missed amount as soon as possible. This establishes the date for the Correction Window clock and demonstrates to the IRS that you're acting in good faith. Don't wait — taking the distribution is required before the IRS will consider any penalty relief.

Step 3: File Form 5329 for the year the RMD was missed

File IRS Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, for each tax year you missed a distribution. File a separate Form 5329 per year — you can't batch multiple missed years on one form.²

On the form, report the full amount that should have been distributed and the amount actually distributed. The difference is your excess accumulation subject to excise tax. Then use the waiver section to request penalty relief (see Step 4).

Step 4: Request a waiver — reasonable cause or Correction Window rate

You have two paths:

• Correction Window (10% rate): If you're within the two-year window, you can elect to pay 10% by completing the penalty calculation at the reduced rate. No explanation needed — it's automatic if the distribution has been taken.
• Full waiver for reasonable cause: On Form 5329, write "RC" (Reasonable Cause) and the dollar amount of the shortfall in the excise tax line, entering $0 as the tax owed. Attach a written explanation to your return. The IRS reviews the request and has routinely granted full waivers when (a) the distribution has been taken, (b) the explanation is credible, and (c) there's no pattern of prior violations.

What qualifies as "reasonable cause"

The IRS doesn't publish an exhaustive list, but documented cases where waivers have been granted include:²

• First-year RMD confusion — particularly around the April 1 "Required Beginning Date" rule (which creates a two-RMD year if you defer)
• New account discovery (inherited accounts not previously known to exist)
• Custodian error or misleading guidance from financial institutions
• Illness, disability, or family emergency preventing proper financial management
• Death of a spouse who managed all account matters
• Reasonable misunderstanding of the RMD rules (first offense, complex situation)

Explanations that don't work well: "I forgot," "I didn't know I had to," or any situation where there's a pattern of repeated missed distributions. First-time mistakes with prompt correction are the sweet spot for full waivers.

How to write the reasonable cause letter

Keep it factual and concise. Cover three things:

1. Why the distribution was missed (the specific cause)
2. What you've done to correct it (date and amount of corrective distribution)
3. How you've ensured it won't happen again (enrolled in automatic distribution, hired an advisor, etc.)

Attach the letter to your amended or current-year return alongside Form 5329.

First-year RMD: the April 1 trap

Your first RMD — the one for the year you turn 73 (or 75 if born 1960 or later) — can be delayed until April 1 of the following year. This is called your Required Beginning Date (RBD). But taking that delay means you must take two RMDs in the second year: the prior year's deferred first RMD and the current year's RMD.

This double-RMD year is one of the most common sources of missed RMDs. Example: You turn 73 in 2025. You delay your first RMD until April 1, 2026. You then owe a second RMD for 2026 by December 31, 2026. Both RMDs in 2026 are taxable income — potentially pushing you into a higher bracket and triggering IRMAA surcharges. Many people take the first RMD before year-end in the year they turn 73 specifically to avoid this compressed income problem.

Inherited IRA missed RMDs: a special case

The SECURE Act's 10-year rule for inherited IRAs (non-spouse beneficiaries must drain the account within 10 years) created enormous confusion about annual RMD requirements during the 10-year period. When the decedent had already begun taking RMDs, annual distributions are required during the 10 years — not just a full drain by year 10.

The IRS issued relief via Notice 2022-53 and Notice 2024-35, waiving penalties for missed inherited IRA RMDs in 2021-2024 while guidance was finalized. That automatic relief has ended for 2025 and forward — T.D. 10001 (July 2024) finalized the annual RMD requirement rules, and the ordinary penalty structure now applies.³ If you've missed inherited IRA distributions since 2025, the standard correction process above applies.

The new statute of limitations

Before SECURE 2.0, if you didn't file Form 5329 for the year of a missed RMD, the IRS's three-year statute of limitations never started — theoretically leaving you exposed indefinitely to penalties from decades-old missed distributions. SECURE Act 2.0 fixed this: the statute of limitations now begins when you file your federal income tax return for the year in question, even if Form 5329 was not filed.¹

This matters practically for people who discover old missed RMDs from accounts they didn't know existed. The IRS's ability to assess the penalty is now time-limited by your return filing date.

Multiple accounts and missed RMD math

IRA RMDs can be pooled — if you have three traditional IRAs, you calculate the RMD from each, sum them, and withdraw the total from any one (or combination) of the accounts. If you inadvertently took the combined RMD from only some accounts and skipped one, your total distribution may still satisfy the aggregate RMD requirement. Calculate your aggregate requirement before assuming you have a shortfall — you may have already met it.

401(k) RMDs cannot be pooled. Each plan must distribute its own RMD separately. If you missed a 401(k) RMD from a former employer's plan, only that plan's missed amount needs correction; you cannot satisfy it with distributions from a different plan.

See our RMD aggregation rules guide for the full breakdown of which accounts can be combined.

When a financial advisor helps most

The correction process is manageable for a straightforward missed IRA RMD. But complexity multiplies when you have:

• Multiple years of missed distributions across multiple accounts
• Inherited IRAs with both the first-generation RMD requirement and the 10-year rule
• A 401(k) or 403(b) at a former employer that wasn't distributing automatically
• A state tax filing implication on top of the federal excise tax
• Prior IRS contact or a formal deficiency notice that has already closed the Correction Window

An advisor who specializes in retirement distribution strategy can calculate the precise shortfall, coordinate with the custodian to take the corrective distribution in the right order, prepare Form 5329 with a documented reasonable cause letter, and structure future years to prevent the problem from recurring — including automatic distribution setups and RMD calendar reminders timed to your Required Beginning Date.