How to Calculate Tax on an RMD: Federal, State, and IRMAA

To calculate the tax on a required minimum distribution, divide your retirement account balance from the prior December 31 by the IRS life expectancy factor for your age, figure out how much of that withdrawal is taxable, add the taxable portion to the rest of your income for the year, and apply the federal tax brackets. For 2026 those brackets run from 10% to 37%, and because the RMD stacks on top of your other income, the last dollars can be taxed at a much higher rate than your first dollars. State income tax, higher Medicare premiums, and more taxable Social Security may follow, so the full cost is usually larger than the federal bracket alone suggests.

Step 1: Calculate the Gross RMD

You need two numbers: your account balance on December 31 of the prior year, and the distribution period from the IRS Uniform Lifetime Table that matches your current age.¹ Divide the balance by the factor.

A 75-year-old with $500,000 in a traditional IRA on the prior December 31 divides $500,000 by the factor of 24.6, producing a gross RMD of roughly $20,325.² The Uniform Lifetime Table is the default. If your sole beneficiary is a spouse more than 10 years younger, you use the Joint Life and Last Survivor Table instead, which produces a larger divisor and a smaller RMD.

Run the calculation separately for each qualifying account. RMDs apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, and most employer plans such as 401(k)s and 403(b)s. Roth IRAs owe no lifetime RMDs, and starting in 2024, designated Roth accounts inside employer plans (Roth 401(k), Roth 403(b)) are also exempt.³

Step 2: Figure Out the Taxable Portion

Most traditional retirement accounts are funded entirely with pre-tax dollars, so the full RMD is taxable. The exception is a traditional IRA to which you made nondeductible (after-tax) contributions at some point. In that case, a slice of every withdrawal comes out tax-free because you already paid tax on that money going in.

You can’t pull the tax-free dollars first. A pro-rata rule treats all your traditional IRA assets as one pool and spreads the taxable and nontaxable portions across every distribution. If 10% of your combined traditional IRA balances came from after-tax contributions, then 10% of your RMD is tax-free and 90% is taxable. Form 8606 tracks that basis year to year.⁴ If you’ve never made a nondeductible IRA contribution, the entire distribution is taxable and Form 8606 doesn’t apply.

Step 3: Stack the Taxable RMD on Your Other Income

The taxable portion of your RMD is ordinary income, taxed at the same rates as wages or a pension. Add it to everything else you earned during the year and apply the federal brackets. For 2026, the brackets for a single filer are:⁵

10% up to $12,400
12% from $12,401 to $50,400
22% from $50,401 to $105,700
24% from $105,701 to $201,775
32% from $201,776 to $256,225
35% from $256,226 to $640,600
37% over $640,600

Married couples filing jointly get brackets roughly double the single-filer thresholds through the 32% bracket. The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly, with an additional amount if you are 65 or older.⁵ A retiree whose only income is a modest RMD may owe little or no federal tax after the standard deduction.

The Bracket-Stacking Effect

RMDs don’t get their own tax rate. They sit on top of your other income, and the last dollars withdrawn can be taxed at a much higher rate than your first dollars. A single filer with $45,000 in pension and Social Security income sits in the 12% bracket. A $20,000 RMD lifts taxable income to $65,000, and the last $14,600 of that RMD is taxed at 22% rather than 12%.⁵ That jump is where most people underestimate the tax bill.

Step 4: Account for Social Security and Medicare Effects

The federal tax on the RMD itself is only part of the cost. The added income can make more of your Social Security benefits taxable. For single filers with combined income above $34,000, up to 85% of Social Security benefits are included in taxable income. An RMD that pushes you over that line effectively creates tax on income you thought was already settled.

Medicare Premium Surcharges (IRMAA)

Medicare uses your modified adjusted gross income from two years earlier to set your Part B and Part D premiums. A 2026 income spike raises your 2028 premiums. For 2026, the standard Part B premium is $202.90 per month. The surcharge tiers for individuals are:⁶

Income up to $109,000: no surcharge ($202.90/month)
$109,001 to $137,000: $81.20 surcharge ($284.10/month)
$137,001 to $171,000: $202.90 surcharge ($405.80/month)
$171,001 to $205,000: $324.60 surcharge ($527.50/month)
$205,001 to $499,999: $446.30 surcharge ($649.20/month)
$500,000 or more: $487.00 surcharge ($689.90/month)

Those thresholds double for married couples filing jointly. At the first surcharge tier, you pay an extra $974 per person per year. At higher tiers the penalty climbs above $5,300 annually. A large RMD in a single year can push you past the $109,000 line and cost you for two years afterward.

Step 5: Add State Income Tax

Most states with an income tax treat RMD income the same way the federal government does, as ordinary taxable income. About a dozen states impose no personal income tax at all, and several others fully or partially exempt retirement account distributions. The variation is wide enough that two retirees with identical RMDs can face very different total tax bills depending on where they live. Check your state’s rules before assuming the federal calculation tells the whole story.

Watch the First-Year Double-Distribution Trap

Under SECURE 2.0, you generally must start RMDs in the year you turn 73 if you were born between 1951 and 1959. If you were born in 1960 or later, the starting age is 75.⁷ For your very first RMD only, you can delay it until April 1 of the year after you reach the applicable age.

The catch: your second RMD is still due by December 31 of that same calendar year, so two taxable distributions land on one tax return.³ On a $500,000 account, that could mean roughly $40,000 of taxable income in one year instead of spread across two. The spike can push you into a higher bracket, increase the taxable share of Social Security, and trigger IRMAA surcharges two years later. Taking the first RMD in the year you turn 73 (or 75) usually produces a better tax result than deferring to April 1.

Reduce the Tax With a Qualified Charitable Distribution

If you are 70½ or older and plan to give to charity anyway, a qualified charitable distribution (QCD) is one of the cleanest ways to shrink your RMD tax. Your IRA custodian sends the distribution directly to a qualifying public charity. The amount counts toward your RMD but never appears as taxable income.⁸

For 2026, the annual QCD limit is $111,000 per person. The gift must go to a qualifying public charity, not a donor-advised fund or private foundation. On your tax return, report the full distribution on Form 1040 line 4a, enter the taxable amount (which may be zero if the entire distribution was a QCD) on line 4b, and write “QCD” next to that line.⁸ Keep the written acknowledgment from the charity. The savings are especially valuable if you take the standard deduction and wouldn’t otherwise get a tax benefit from charitable giving.

Withholding, Estimated Payments, and Reporting

You can elect to have federal income tax withheld from the distribution. For most one-time RMD withdrawals, you use Form W-4R. Custodians typically default to 10% withholding on non-periodic IRA distributions if you don’t specify a rate, so review the form before the money moves.

A useful quirk: taxes withheld from a retirement account distribution are treated as paid evenly across the year, regardless of when you actually take the withdrawal. Taking your full RMD in December with a high withholding rate can cover shortfalls from earlier in the year and help you avoid an underpayment penalty. If withholding isn’t enough, quarterly estimated payments fill the gap. The safe harbor rule shields you from underpayment penalties if your total withholding and estimated payments equal at least 100% of last year’s tax liability, or 110% if your prior-year adjusted gross income exceeded $150,000.⁹ You also avoid the penalty if you owe less than $1,000 at filing.

After year-end, your custodian issues Form 1099-R showing the gross distribution and any tax withheld. Report the gross amount on Form 1040 line 4a and the taxable amount on line 4b.³ If part of the distribution was a QCD or you have basis from nondeductible contributions, line 4b will be lower than line 4a.

Penalty for Missing an RMD

If you withdraw less than the required amount, the IRS imposes a 25% excise tax on the shortfall. Miss a $20,000 RMD and you owe a $5,000 penalty on top of the income tax you’ll still owe on the distribution when you eventually take it.¹⁰

If you correct the shortfall during the “correction window,” the penalty drops to 10%. That window runs through the end of the second tax year after the year you missed the RMD, or until the IRS assesses the tax or mails a deficiency notice, whichever comes first.¹⁰ Catching the mistake quickly and withdrawing the missed amount saves 15 percentage points on the penalty.

1
Internal Revenue Service. Retirement Topics – Required Minimum Distributions
2
Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements (IRAs)
3
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
4
Internal Revenue Service. Form 8606 – Nondeductible IRAs
5
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
6
Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
7
Office of the Law Revision Counsel. 26 USC 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans
8
Internal Revenue Service. Seniors Can Reduce Their Tax Burden by Donating to Charity Through Their IRA
9
Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty
10
Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans