The missed RMD penalty in 2026 is a 25% excise tax on the amount of a required minimum distribution you were supposed to take but did not, and it can drop to 10% if you correct the shortfall in time (Source: 26 U.S.C. 4974; IRS Publication 590-B, 2025). This guide gives the exact rate, worked dollar examples, the precise correction window, the Form 5329 fix, and how to request a reasonable-cause waiver.
The missed RMD penalty is a 25% excise tax on the amount you failed to withdraw (Source: 26 U.S.C. 4974(a); IRS Pub. 590-B, 2025). SECURE 2.0 cut it from 50% starting in 2023. The rate falls to 10% if you take the missed amount and file a return reflecting the tax within the correction window, and the IRS may waive it entirely for reasonable cause on Form 5329.
What is the penalty for a missed RMD in 2026?
The missed RMD penalty in 2026 is a 25% excise tax on the difference between the required minimum distribution you should have taken and the amount you actually withdrew (Source: 26 U.S.C. 4974(a); IRS Pub. 590-B, 2025). The statute calls this the tax on excess accumulations, and the account owner pays it, not the plan.
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The tax applies to the shortfall, not the whole account. If your RMD was $10,000 and you withdrew nothing, the 25% tax hits the full $10,000; if you withdrew $6,000, it hits only the $4,000 shortfall (Source: 26 U.S.C. 4974(a)). This excise tax is separate from and on top of the ordinary income tax owed when the distribution is finally taken. See our guide to required minimum distributions for 2026.
How much is the penalty? Worked dollar examples
At a 25% rate, the missed RMD penalty equals one dollar of excise tax for every four dollars of missed distribution. The table shows the base 25% tax beside the reduced 10% figure that applies when the shortfall is corrected within the correction window (Source: 26 U.S.C. 4974(a), (e)).
| Missed RMD amount | Penalty at 25% | Penalty at 10% (timely corrected) |
|---|---|---|
| $4,000 | $1,000 | $400 |
| $10,000 | $2,500 | $1,000 |
| $20,000 | $5,000 | $2,000 |
| $50,000 | $12,500 | $5,000 |
These figures are the excise tax only. Ordinary income tax on the distribution is owed on top when the money is withdrawn, and the added income can raise other items such as the net investment income tax for 2026 (Source: IRS Pub. 590-B, 2025).
Is the RMD penalty still 50%? How it dropped to 25%
No, the missed RMD penalty is no longer 50%. Before 2023, the excise tax on a missed RMD was 50% of the shortfall. The SECURE 2.0 Act, Section 302, cut it to 25% and added a 10% tier for timely corrections (Source: SECURE 2.0 Act, Section 302, Pub. L. 117-328).
The change applies to taxable years beginning after December 29, 2022, so the 25% and 10% rates govern from the 2023 tax year onward (Source: SECURE 2.0 Act, Section 302(c), Pub. L. 117-328). Older articles that still quote 50% are outdated for any current-year shortfall; for 2026 the rate is 25%.
How do I get the reduced 10% rate? The correction window explained
The missed RMD penalty drops from 25% to 10% if, during the correction window, you take a distribution of the missed amount from the same plan and file a tax return reflecting the excise tax (Source: 26 U.S.C. 4974(e)(1); IRS Pub. 590-B, 2025). Both steps must happen inside the window.
The window is often summarized loosely as two years, but the statute defines it precisely. It begins when the tax is imposed and ends on the earliest of three events (Source: 26 U.S.C. 4974(e)(2)):
- The date the IRS mails a notice of deficiency under Section 6212;
- The date the tax is assessed by the IRS; or
- The last day of the second taxable year that begins after the end of the taxable year in which the tax was imposed.
The takeaway is that the window can close earlier than a full two years if the IRS issues a deficiency notice or assesses the tax first (Source: 26 U.S.C. 4974(e)(2)). Correcting promptly is what preserves the 10% rate.
How do I fix a missed RMD, step by step?
To fix a missed RMD, take the money, report the shortfall on Form 5329 for each missed year, and then either claim the 10% reduced rate or request a full waiver (Source: IRS Form 5329 Instructions, 2025). The steps below follow the current instructions.
- Withdraw the missed distribution from the affected account as soon as the shortfall is discovered (Source: IRS Pub. 590-B, 2025).
- Complete Form 5329, reporting the excess accumulation in the RMD section (Part IX on the 2024 form), and file a separate Form 5329 for each missed year (Source: IRS Form 5329 Instructions, 2025).
- Determine whether the 10% reduced rate applies, which requires the corrective distribution and a return reflecting the tax within the correction window (Source: 26 U.S.C. 4974(e)(1)).
- To request a waiver, figure the tax as if the full amount were due, subtract the waiver amount, enter RC (reasonable cause) next to the line, and attach a statement of explanation (Source: IRS Form 5329 Instructions, 2025).
Can the RMD penalty be waived for reasonable cause?
Yes. The IRS may waive part or all of the missed RMD penalty if you show the shortfall was due to reasonable error and that you are taking reasonable steps to remedy it (Source: 26 U.S.C. 4974(d); IRS Form 5329 Instructions, 2025). Common reasonable-error examples include serious illness, a custodian or plan error, or incorrect professional advice.
To request it, file Form 5329, subtract the waiver amount, and attach a letter of explanation describing the error and the corrective distribution (Source: IRS Form 5329 Instructions, 2025). The waiver is not automatic; the statute gives the Secretary discretion. Self-reporting the shortfall and remedying it promptly, then keeping records of when it was found and fixed, supports the request.
What if the missed RMD is in a 401(k) or workplace plan?
A missed RMD in a 401(k) or other workplace plan is corrected through the plan under the IRS Employee Plans Compliance Resolution System (EPCRS), a path separate from the Form 5329 route used for IRAs (Source: IRS Rev. Proc. 2021-30). Smaller or recent failures often qualify for Self-Correction; other cases use the Voluntary Correction Program (VCP).
VCP is filed on Form 8950 with a model correction such as Schedule 8 of Form 14568 (Form 14568-H) for RMD failures, and it lets the plan ask the IRS to waive the related excise tax for affected participants (Source: IRS Rev. Proc. 2021-30). Because the fix depends on the plan document and failure type, coordinate with the plan administrator.
When do RMDs start and which accounts are covered?
Required minimum distributions currently begin at age 73. Your required beginning date is April 1 of the year after you reach age 73, and for every year after that the RMD is due by December 31 (Source: IRS Pub. 590-B, 2025). Waiting until April 1 for a first RMD means two distributions land in one calendar year.
RMDs apply to traditional IRAs, SEP and SIMPLE IRAs, and workplace plans such as 401(k) plans (Source: IRS RMD Comparison Chart, IRAs vs. Defined Contribution Plans). Roth IRAs are not subject to RMDs during the owner’s lifetime, one reason some retirees weigh a Roth conversion strategy or model how much to convert to Roth before RMDs begin.
Under SECURE 2.0, Section 107, the applicable age rises to 75 for individuals born in 1960 or later, so the earliest year an age-75 RMD is actually due is 2035 (Source: SECURE 2.0 Act, Section 107, Pub. L. 117-328). For 2026 planning, age 73 remains the operative starting age.
Inherited IRAs and missed beneficiary RMDs
Inherited IRAs carry their own RMD rules, and missed distributions on them can also trigger the 25% excise tax. For owners who died after December 31, 2019, many non-spouse beneficiaries who are not eligible designated beneficiaries face a 10-year rule requiring the account to be emptied by the end of the tenth year after the year of death (Source: SECURE Act of 2019, Pub. L. 116-94; IRS Pub. 590-B, 2025).
The IRS waived the excise tax for certain missed beneficiary RMDs for 2021 through 2024 while the regulations were finalized (Source: IRS Notice 2024-35). The final regulations apply for calendar years beginning on or after January 1, 2025, so those annual beneficiary distribution requirements take effect for 2025 (Source: IRS Notice 2024-35). Because these rules turn on beneficiary type and date of death, confirming the specific facts matters.
Quick-reference table: how the RMD penalty is calculated
This table summarizes how the missed RMD penalty is calculated in 2026, from the base rate through the reporting form and age rules, with the governing source for each item (Source: 26 U.S.C. 4974; IRS Pub. 590-B, 2025).
| Item | Rule (2026) | Source |
|---|---|---|
| Base penalty | 25% of the shortfall | 26 U.S.C. 4974(a) |
| Reduced penalty | 10% if corrected in the correction window | 26 U.S.C. 4974(e) |
| Prior penalty (before 2023) | 50% of the shortfall | SECURE 2.0 Act, Sec. 302 |
| Correction window ends | Earliest of deficiency notice, assessment, or the second taxable year | 26 U.S.C. 4974(e)(2) |
| Reporting form (IRA) | Form 5329, Part IX, one per missed year, with RC statement | IRS Form 5329 Instructions, 2025 |
| Workplace-plan fix | EPCRS Self-Correction or VCP (Form 14568-H) | IRS Rev. Proc. 2021-30 |
| Waiver basis | Reasonable error plus reasonable steps to remedy | 26 U.S.C. 4974(d) |
| RMD start age | 73 for those born 1951 to 1959; age 75 for those born 1960 or later, first due 2035 | IRS Pub. 590-B, 2025; SECURE 2.0 Sec. 107 |
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Frequently asked questions
What is the penalty for not taking a required minimum distribution?
The penalty is a 25% excise tax on the amount you were required to distribute but did not (Source: 26 U.S.C. 4974(a); IRS Pub. 590-B, 2025). The rate falls to 10% if you take the missed amount and file a return reflecting the tax within the correction window. Ordinary income tax on the distribution is also owed when it is withdrawn.
How do I fix a missed RMD?
Withdraw the missed amount from the account right away, then file Form 5329 for each missed year to report the shortfall (Source: IRS Form 5329 Instructions, 2025). From there you either qualify for the 10% reduced rate by correcting within the window, or attach a statement requesting a full waiver for reasonable cause. Workplace-plan failures are fixed through EPCRS instead.
Can the RMD penalty be waived?
Yes, the IRS may waive part or all of the tax if you show the shortfall was due to reasonable error and you are taking reasonable steps to remedy it (Source: 26 U.S.C. 4974(d)). You file Form 5329, subtract the waiver amount, enter RC next to the line, and attach a statement of explanation. Waivers are not automatic; the IRS reviews the facts.
How long do I have to correct a missed RMD?
The correction window for the 10% rate begins when the tax is imposed and ends on the earliest of three events: the date the IRS mails a deficiency notice, the date the tax is assessed, or the last day of the second taxable year after the year of the shortfall (Source: 26 U.S.C. 4974(e)(2)). It can close before a full two years if the IRS acts first.
Do I still owe income tax on a missed RMD?
Yes. The 25% excise tax is separate from and on top of ordinary income tax (Source: IRS Pub. 590-B, 2025). The missed distribution is taxable as income in the year it is finally withdrawn, so the same dollars can carry both the excise tax and regular income tax. Correcting the shortfall does not remove the income tax.
What form do I file for a missed RMD?
For an IRA, you file Form 5329, Additional Taxes on Qualified Plans and Other Tax-Favored Accounts, reporting the shortfall in the RMD section (Part IX on the 2024 form) and filing a separate Form 5329 for each missed year (Source: IRS Form 5329 Instructions, 2025). Missed RMDs inside a 401(k) or workplace plan are corrected through EPCRS, using Form 14568-H under VCP.
What happens if you forget to take your RMD?
If you forget your RMD, the shortfall is subject to a 25% excise tax until you correct it (Source: 26 U.S.C. 4974(a)). The practical fix is to withdraw the missed amount immediately, file Form 5329, and either correct within the window for the 10% rate or request a reasonable-cause waiver. Acting promptly helps preserve the reduced rate and supports a waiver request.
Is the RMD penalty still 50%?
No. The 50% rate applied only to tax years before 2023. The SECURE 2.0 Act, Section 302, reduced the excise tax to 25%, with a 10% tier for timely corrections, effective for taxable years beginning after December 29, 2022 (Source: SECURE 2.0 Act, Section 302, Pub. L. 117-328). For any 2026 shortfall, the rate is 25%, not 50%.
Sources
26 U.S.C. 4974 (statute): https://www.law.cornell.edu/uscode/text/26/4974
IRS Publication 590-B (2025): https://www.irs.gov/pub/irs-pdf/p590b.pdf
IRS Form 5329 Instructions (2025): https://www.irs.gov/pub/irs-pdf/i5329.pdf
IRS Retirement Topics, Required Minimum Distributions: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds
IRS RMD Comparison Chart (IRAs vs. Defined Contribution Plans): https://www.irs.gov/retirement-plans/rmd-comparison-chart-iras-vs-defined-contribution-plans
IRS Revenue Procedure 2021-30 (EPCRS): https://www.irs.gov/pub/irs-drop/rp-21-30.pdf
IRS Notice 2024-35: https://www.irs.gov/pub/irs-drop/n-24-35.pdf
SECURE Act of 2019, Pub. L. 116-94: https://www.congress.gov/116/plaws/publ94/PLAW-116publ94.htm
SECURE 2.0 Act, Pub. L. 117-328: https://www.congress.gov/117/plaws/publ328/PLAW-117publ328.htm
