Can taxpayers opt out or change federal withholding on RMDs after the 2026 rule changes, and what forms are required?
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Executive summary
Taxpayers retain the ability to change or even waive federal income-tax withholding on required minimum distributions (RMDs) after the RMD rule updates that were deferred into the 2026 distribution year, but the election and mechanics are handled at the account custodian/sponsor level rather than by a new, universal IRS withholding form in the sources reviewed [1] [2] [3] [4]. Custodians commonly apply a 10% default federal withholding on taxable RMDs if no election is made, and permit taxpayers to elect a different percentage or to opt out entirely using custodian distribution/withholding election forms; state withholding may require a separate state form [3] [4] [5].
1. What changed and when it takes effect: the 2026 applicability delay
The IRS postponed the effective date for certain proposed RMD regulations so those provisions will not apply earlier than the 2026 distribution calendar year, and taxpayers and recordkeepers were told to use reasonable, good‑faith interpretations of the statutory changes until the final applicability date [1] [2] [6].
2. Can taxpayers opt out of federal withholding on RMDs?
Yes; multiple industry and custodian guidance pieces state that federal withholding on RMDs is elective — participants may elect more or less withholding or even waive withholding entirely — and that withholding is optional for most taxable RMD distributions [4] [7] [8]. Custodian documents show that if a taxpayer does not make an election the firm will often withhold a default 10% on the taxable portion of a distribution [3] [4].
3. Can taxpayers change federal withholding after the 2026 rule changes?
Changing federal withholding remains possible after the rule changes: advisers and tax guides recommend instructing the custodian to withhold a specific percentage or flat dollar amount from the RMD, and many retirees use that mechanism to cover federal estimated-tax obligations [9] [7] [8]. The sources indicate this remains a custodian-initiated election — taxpayers instruct the plan or IRA custodian to alter withholding on distributions [3] [4].
4. What forms are required to opt out or change withholding (what the reporting actually shows)
The reviewed sources show that the election is made via the custodian’s distribution/withholding election form or electronic/phone distribution options (for example, Fidelity’s FA IRA distribution form), and that if a taxpayer wants to opt out of state withholding when federal tax is withheld they may need to submit a state-specific form [3] [5]. The reporting does not provide a single, new IRS universal form number for RMD withholding elections in the context of the 2026 regulatory changes; instead, it documents custodian forms and state forms as the practical instruments to change or waive withholding [3] [5] [4].
5. Practical effects and enforcement risks to keep in mind
Withholding elections affect the cash a retiree receives but do count toward tax liability for the year — custodians treat withheld amounts as tax payments — and missed RMDs themselves can trigger an excise tax and require filing Form 5329 to report additional tax if an RMD is not taken [9] [10]. Taxpayers relying on withholding to cover estimated-tax obligations should confirm custodian procedures and timing because distribution timing (for example delaying until December) can influence withholding strategy and estimated‑tax treatment [9] [11].
6. Gaps, alternative viewpoints and source limitations
The authoritative IRS guidance pages in the record explain RMD rules and penalties but do not list a single universal IRS withholding election form linked to the 2026 rule changes; the practitioner and custodian sources instead document the operational reality that custodians require their own distribution/withholding election forms and that some states require separate state forms when federal withholding is chosen or declined [10] [3] [5]. If a definitive IRS form number or a new federal mandate for withholding elections was issued after these sources, that detail is not shown in the materials provided.