Insight Article

2024 Update: waiver of RMDs for inherited IRA beneficiaries

May 22, 2024 | by Kushner LaGraize, LLC

The IRS recently issued Notice 2024-35, which provides significant relief for certain beneficiaries of inherited IRAs. This notice waives the requirement for these beneficiaries to take required minimum distributions  (RMDs) for 2024 if they are subject to the SECURE Act’s 10-year payout rule. 

Inherited IRA distribution rules

Before the SECURE Act of 2019, beneficiaries of inherited IRAs could spread out their withdrawals over their lifetime, a strategy often referred to as the “stretch” IRA. This approach allowed beneficiaries to lower their annual tax liability. However, the SECURE Act significantly altered the rules surrounding RMDs. 

Under the new regulations, non-eligible designated beneficiaries who are neither the spouse, a minor child, disabled, chronically ill, or certain trusts of the deceased must exhaust their inherited IRAs by the tenth year following the original account holder’s death. Additionally, if the original account holder had already commenced their RMDs, these beneficiaries are also required to continue taking these distributions throughout the 10-year period. 

However, in the recent Notice, the IRS specified that non-eligible beneficiaries do not need to make these mandatory withdrawals in 2024. This effectively suspends the excise tax for failing to take RMDs during this period for those beneficiaries subject to the 10-year rule. The waiver applies if the original account holder died in 2020, 2021, 2022, or 2023 and had reached their required beginning date, typically April 1 of the year after the owner turns 73.

Implications for tax planning

This delay in mandatory distributions could provide tax planning opportunities for beneficiaries, potentially allowing them to manage income more effectively and reduce their overall tax liability for the year. In the meantime, beneficiaries are advised to consult with financial advisors to understand their responsibilities and potential penalties under the SECURE Act. The IRS’s extensions may provide some short-term relief, but beneficiaries will need to plan for the eventual expiration of these waivers. For more information or tailored guidance, please contact our office. 


Let's Talk!

Call us at (504) 838-9991 or fill out the form below and we'll contact you to discuss your specific situation.

  • Should be Empty:
  • Topic Name:

Kushner LaGraize, LLC

Kushner LaGraize, LLC, is a full-service accounting firm located in Metairie, Louisiana, serving clients principally in the New Orleans metropolitan area.

Our most important product is personalized and prompt client service. This philosophy is reflected in the fact that every service we perform for each client has the direct, personal supervision of one of our partners. We take tremendous professional and personal pride in being responsive to our client’s needs. We are available when our clients need us, and often before they realize a problem exists. Handling potentially troublesome situations before they evolve into problems leaves a lot more time and energy to devote toward productive opportunities.

For more information on how Kushner LaGraize, LLC can assist you, please call (504) 838-9991.