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Fact check: What are the proposed changes to required minimum distributions in the 2026 tax reform?
Executive summary
The IRS has postponed the effective date of a package of proposed Required Minimum Distribution (RMD) regulations from 2025 to January 1, 2026, giving plan sponsors, recordkeepers and taxpayers more time to prepare for changes that affect required beginning dates, spousal elections, partial annuities and distributions from Roth accounts [1] [2]. These proposed rules are tied to legislative shifts from the SECURE Act 2.0—such as staggered increases in the RMD start age and forthcoming treatment of Roth sources—and commentators flagged practical implementation problems that prompted the delay [3] [1].
1. Why the IRS hit pause — Administrative realities and commenter pushback
The IRS delayed the regulations because commenters raised significant implementation concerns that made a 2025 effective date impractical; the agency extended the anticipated applicability date to January 1, 2026 to address these issues and provide industry time to adapt [1]. The stated problems include operational complexity for plan administrators and recordkeepers in applying new rules to diverse plan designs, reconciling spousal election mechanics, and integrating changes for designated Roth accounts and partial annuity options. The administrative rationale is consistent across IRS notices summarized in January 2025, which emphasize feasibility and readiness rather than substantive policy reversals [2] [4]. Plan sponsors and recordkeepers are the immediate stakeholders required to build systems and processes to comply with these revised timelines.
2. What the proposed RMD rules actually change — The substantive shifts on the table
The proposed regulations issued in 2024 and now delayed into 2026 would modify how required beginning dates, spousal election procedures, partial annuity distributions, and designated Roth account treatments are administered for IRAs and defined contribution plans [2] [4]. These proposals adjust the mechanics by which beneficiaries and surviving spouses make elections and how trustees compute and distribute annuity-type RMDs and corrective distributions. The package does not emerge in a vacuum: statutory changes from SECURE Act 2.0 already increased RMD start ages to 73 (in 2023) and 75 (in 2033) and set rules that will exclude Roth sources from RMD calculations beginning January 1, 2027, which interact materially with the proposed regulatory clarifications [3].
3. How the SECURE Act 2.0 interacts with the rule changes — Timing and tax planning consequences
SECURE Act 2.0 legislatively shifted the RMD landscape by raising the age thresholds and altering Roth treatment; regulators’ proposed rules aim to implement and clarify how these statutory changes operate in practice, but the timing mismatch created friction. SECURE Act 2.0 made Roth sources excluded from RMD calculations starting in 2027, while the IRS’s proposed clarifications would govern the practical application of Roth and non-Roth accounts earlier; taxpayers and advisors must reconcile these timelines when planning Roth conversions, withdrawals and distribution sequencing [3] [5]. The IRS delay to 2026 explicitly recognizes that alignment between statutory dates, regulatory mechanics, and recordkeeper readiness is essential for predictable tax planning.
4. Competing perspectives — Who benefits and who warns of risks
Supporters of the delay frame it as necessary to avoid costly operational errors by custodians and plan administrators and to give beneficiaries certainty about spousal elections and annuity computations [1] [2]. Industry groups representing recordkeepers and plan sponsors likely advocated for additional time to adjust systems and client communications. Critics — especially taxpayer advocates and some financial advisors — may argue that delays prolong uncertainty for retirees trying to plan around RMD timing and Roth conversions; these stakeholders emphasize the need for clear rules to avoid inadvertent penalties and misapplied distributions [5] [6]. The IRS’s public explanation emphasizes administrative feasibility rather than policy preference, but stakeholders’ positions reflect differing operational and client-facing priorities.
5. What taxpayers and sponsors should watch next — Practical milestones and implications
With the effective date moved to January 1, 2026, plan sponsors, custodians and advisors have a defined window to implement system changes, update participant notices, and refine distribution processes; this delay also underscores the importance of monitoring final regulations and IRS guidance leading up to 2026 [1] [4]. Taxpayers making Roth conversion decisions and retirees planning RMD-driven income should incorporate the interplay between the delayed regulations and SECURE Act 2.0’s statutory milestones—notably the Roth exclusion from RMD calculations beginning 2027 and the staggered RMD start ages [3] [5]. Expect further clarity from the IRS in the months before 2026, but until final regulations are promulgated, plan administrators must balance readiness with flexibility to implement the eventual final rules.