Blog · 15 October 2026

Required Minimum Distributions for 2026: Form 5329 Penalties, Uniform Lifetime Table Rules and What US CPA Firms Should Tell Clients

By Keshav Bansal, CA

Year-end required minimum distributions (RMDs) are a calendar deadline clients cannot roll over. The Motley Fool’s October 11, 2026 reminder (Kailey Hagen, CFP®) flags that people who will be 74 or older by December 31 must finish their 2026 RMDs by year-end, while clients turning 73 in 2026 may wait until April 1, 2027 for the first withdrawal—but often should not, because delaying stacks two RMDs into 2027. IRS Retirement topics and Publication 590-B currently state that owners generally must begin RMDs at age 73; taxable amounts are ordinary income (except basis or qualified Roth distributions), and a shortfall can trigger a Form 5329 excise tax. For US CPA firms, the job is account inventory, deadlines, aggregation and AGI side effects.

Who must take a 2026 RMD, and by when

Per the IRS RMD topic page (updated April 8, 2026) and RMD FAQs, you generally must start withdrawing from traditional IRAs, SEP IRAs, SIMPLE IRAs and most workplace plans at age 73. Roth IRAs and designated Roth accounts do not require owner-lifetime RMDs; beneficiaries still face RMD rules after the owner’s death.

For IRAs, the first RMD is due by April 1 of the year after the year you reach 73; every later year’s RMD is due by December 31. Waiting until April 1 for the first RMD usually means a second RMD is also due by December 31 of that same year—two taxable withdrawals in one year. Motley Fool’s October 11 piece makes the same point for clients turning 73 in 2026.

For a 401(k), profit-sharing, 403(b) or similar plan, the required beginning date is generally April 1 following the later of the year you reach 73 or the year you retire—if the plan allows the delay. The still-working exception does not apply to a 5% owner of the sponsoring business; Form 5329 instructions say a more-than-5% owner must begin by April 1 of the year after reaching 73 even if still employed. Plan terms can also require distributions at 73 while still working.

How to calculate an RMD (Uniform Lifetime Table)

The IRS formula is prior December 31 account balance divided by a life-expectancy factor from the Uniform Lifetime Table in Publication 590-B (Table III for most unmarried owners and for married owners whose spouse is not more than 10 years younger or is not the sole beneficiary). Use Table II (joint life) only when the sole beneficiary is a spouse more than 10 years younger. Do not invent table factors; pull the denominator from Pub. 590-B or custodian worksheets for the client’s age as of their birthday in the distribution year. Pub. 590-B’s illustration for a 75-year-old using Table III factor 24.6 shows a $100,000 balance producing a $4,065 RMD ($100,000 ÷ 24.6).

You may withdraw more than the RMD. Extra amounts do not credit against a future year’s requirement. RMDs are not eligible for rollover into another tax-deferred account.

IRA aggregation vs 401(k)s—and a brief QCD option

IRS FAQ Q5 is the rule clients mix up every December: calculate the RMD separately for each IRA, but you may take the total from one or more IRAs. The same aggregation idea applies across 403(b) contracts. RMDs from 401(k), 457(b) and similar plans must come from each plan separately—you cannot satisfy one plan’s RMD from another plan’s account.

A qualified charitable distribution (QCD) from an IRA can count toward that year’s RMD without raising AGI the way a taxable withdrawal does. Mechanics, Form 1099-R Code Y and the 2026 dollar limit are in our qualified charitable distributions and Form 1099-R Code Y guide; here the point is only that a properly executed QCD is a year-end RMD tool for charitable clients.

Taxability, AGI knock-ons and Form 5329 if you miss

Withdrawals are included in taxable income except for amounts that represent basis or that qualify as tax-free Roth distributions. Ordinary-income RMDs raise AGI, which can increase taxation of Social Security benefits under §86—see our Social Security benefits tax guide—and can push MAGI over the Form 8960 NIIT thresholds even though qualified-plan and IRA distributions are generally outside the net investment income base itself (our NIIT and Form 8960 article).

If the full RMD is not taken by the deadline, the IRS RMD topic page and Form 5329 instructions impose an excise tax of 25% on the shortfall. The rate drops to 10% if, during the correction window, the taxpayer takes the missed amount and files a return reflecting the tax. Form 5329 instructions end that window on the earliest of a deficiency-notice mailing, assessment or the last day of the second taxable year beginning after the year the tax is imposed (the RMD topic page summarizes this as 10% if withdrawn within two years). Reasonable-cause waiver remains available via Form 5329 plus an explanation.

Aside: inherited-IRA timing (including the SECURE Act 10-year rule for many non-spouse heirs) is a separate project from owner year-end RMDs—do not conflate heir deadlines with the December 31 owner calendar.

What US CPA firms should tell clients

• Inventory every account. Traditional / SEP / SIMPLE IRAs, each 401(k)/403(b)/457(b), and Roth status; note still-working and 5% owner facts for workplace plans.
• Map deadlines. Ongoing RMDs: December 31, 2026. First-year clients turning 73 in 2026: April 1, 2027 is allowed, but model the two-RMD-in-2027 income spike before they wait.
• Use IRS tables, not guesses. Prior December 31 balance ÷ Pub. 590-B Uniform Lifetime (or Table II) factor; confirm custodian calculations.
• Respect aggregation limits. IRAs (and 403(b)s) may be combined for payout; each 401(k)-type plan must be satisfied from that plan.
• Plan AGI. Taxable RMDs can affect Social Security taxation and NIIT MAGI; QCDs can satisfy IRA RMDs without the same AGI hit when rules are met.
• If short: take the missed amount, evaluate the 10% correction path and reasonable-cause waiver, and file Form 5329.

A short firm checklist

1. List clients age 73+ (and those turning 73 in 2026) with retirement-account types and December 31, 2025 balances.
2. Flag 5% owners and still-working plan participants whose plan does or does not allow delay.
3. Compute each IRA RMD, total, and choose payout IRA(s); compute each plan RMD separately.
4. Schedule withdrawals (or QCDs) with enough lead time for custodians before December 31.
5. Project AGI effects on Social Security and NIIT; document any Form 5329 shortfall/correction if needed.

Where this fits for Tax Brew readers

RMD season is deadline control, table math and AGI modeling for firms serving retirees and still-working owners. If your firm needs capacity, outsourced tax prep and bookkeeping support for US CPA firms can help. Email info@taxbrewglobal.com.

Sources: IRS Retirement topics — Required minimum distributions (RMDs) (updated Apr. 8, 2026); IRS Retirement plan and IRA required minimum distributions FAQs; IRS Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs); Instructions for Form 5329 (2025), Part IX; The Motley Fool, Kailey Hagen, CFP®, “Still Haven’t Taken Your 2026 RMDs? Here’s What You Need to Do.” (Oct. 11, 2026). IRS pages currently state RMD age 73 generally. General information, not tax or legal advice. Sources as of 15 October 2026.