If you missed a required minimum distribution, you can fix it in five steps: figure out the shortfall, withdraw it from the account now, complete IRS Form 5329 for the year you missed, attach a short letter explaining what happened, and mail everything in. The penalty is 25% of what you failed to withdraw, but the IRS routinely waives it in full when the miss was an honest mistake and you’ve already corrected it. Move quickly and the odds are strongly in your favor.
Why Speed Changes the Penalty
Federal law imposes an excise tax equal to 25% of any RMD amount you failed to withdraw on time.1Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans Before 2023 the rate was 50%, so the current figure already reflects a reduction under the SECURE 2.0 Act.
The rate drops to 10% if you take the missed amount and file the paperwork inside a “correction window.” That window runs from the date the penalty applies until the earliest of three events: the IRS mails you a deficiency notice, the IRS assesses the tax, or the last day of the second tax year after the year you missed the RMD.1Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans In practical terms, you usually have about two years. And if you also request a reasonable cause waiver, the IRS can eliminate the penalty entirely. Most people who complete the steps below pay nothing.
Step 1: Calculate the Missed Amount
Your RMD for a given year is your account balance on December 31 of the prior year divided by a life expectancy factor from the IRS tables.2Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs If your IRA held $500,000 on December 31 of the prior year and your life expectancy factor is 26.5, your RMD is $18,868.
Most account owners use the Uniform Lifetime Table in IRS Publication 590-B. The one exception: if your spouse is both the sole beneficiary and more than ten years younger, you use the Joint Life and Last Survivor Expectancy Table, which produces a smaller required withdrawal.3Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
Your shortfall is the required amount minus whatever you actually withdrew that year. If you took nothing, the entire RMD is your shortfall. Write the number down. It drives every step that follows.
Step 2: Take the Catch-Up Withdrawal
Contact the financial institution holding the account and request a distribution equal to the full shortfall. Do this before you file anything with the IRS. The waiver request depends on showing you’ve already fixed the problem, so the withdrawal has to happen first.
The catch-up distribution is taxable income in the year you actually receive it, not the year you originally missed. Your custodian will report it on Form 1099-R and send a copy to the IRS.4Internal Revenue Service. About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Keep that 1099-R. It documents the correction and you’ll need it at tax time.
If you missed RMDs across more than one year, take a separate catch-up withdrawal for each year’s shortfall rather than combining them into a single transaction. Clean records make the IRS review easier.
Which Account You Have to Pull From
The aggregation rules trip people up. If you own multiple traditional IRAs, you can calculate each one’s RMD separately but pull the combined total from whichever IRA you choose. That flexibility does not carry over to employer plans. If you missed an RMD from a 401(k), the catch-up has to come from that specific 401(k), not from an IRA or a different 401(k). Multiple 403(b) accounts can be aggregated with each other, similar to IRAs.5Internal Revenue Service. RMD Comparison Chart (IRAs vs. Defined Contribution Plans)
Step 3: Complete Form 5329
IRS Form 5329, “Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts,” is where you report the missed RMD and request the waiver.6Internal Revenue Service. About Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts Use the version of the form that matches the year you missed the RMD, not the current year. For a 2024 miss, use the 2024 Form 5329.
Go to Part IX:
- On lines 52 and 53, enter the amount that should have been distributed and the amount you actually took. The difference is your shortfall.
- On the dotted line next to lines 54a/54b, write “RC” followed by the shortfall amount in parentheses. That code tells the IRS you are requesting a reasonable cause waiver. Subtract the waiver amount from the shortfall and enter the result on the line itself. For a full waiver request, the result is zero.
- Line 55 is the tax due. If you entered zero on line 54, this is also zero.
The “RC” notation is the mechanic that matters. You are self-reporting a $0 penalty and asking the IRS to accept it. If they do, you never hear about it. If they disagree, they will send a notice assessing the penalty.7IRS. 2025 Instructions for Form 5329 – Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts
Step 4: Write the Reasonable Cause Letter
Attach a short written statement explaining why you missed the RMD and what you did to fix it. The IRS has discretion to waive the entire penalty when the miss was due to reasonable error and the taxpayer is taking steps to comply going forward.7IRS. 2025 Instructions for Form 5329 – Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts The letter is where you make that case.
Keep it factual. Include your name, Social Security number, the tax year of the miss, the account involved, and the shortfall amount. Then explain what happened. Reasons the IRS commonly accepts include serious illness, a death in the family, bad advice from a financial professional, confusion about the starting age, or an administrative error at the brokerage. A specific explanation (“I was hospitalized from March through June and my custodian did not have automatic distributions set up”) reads better than a vague one (“I forgot”).
Close by describing what you have changed so it won’t happen again. Setting up automatic annual withdrawals with your financial institution is the strongest step you can take, and it is worth mentioning even if you’re still in the process of arranging it. The IRS wants to see the problem is not going to repeat.
Step 5: File the Paperwork
If you haven’t yet filed your income tax return for the year you missed, attach Form 5329 and the reasonable cause letter to your Form 1040 and send everything together. That is the simplest path.
If you’ve already filed your return for that year, mail Form 5329 as a standalone submission. On a standalone filing, include your address on page 1 and sign and date page 3. A standalone Form 5329 cannot be e-filed. Mail it to the same address you would use for your Form 1040.8Internal Revenue Service. Instructions for Form 5329 (2025)
Missed RMDs across multiple years get a separate Form 5329 for each year, each with its own reasonable cause statement, each on the form version matching that year. You can put them all in the same envelope.
What Happens After You File
The most common outcome is silence. The IRS accepts the waiver and no bill arrives. If the IRS disagrees, you’ll receive a notice in the mail assessing the penalty, and at that point you can pay it, contest it, or call the number on the notice. There is no guaranteed response timeline, so months of no mail is typically a good sign.
Inherited IRAs Are a Separate Situation
If the account you missed an RMD from is an inherited IRA, know that the rules are their own subject and have shifted recently. Most non-spouse beneficiaries who inherited an account after 2019 must empty it within ten years of the original owner’s death, and finalized IRS regulations confirm that if the original owner had already started taking RMDs before dying, the beneficiary must take annual distributions during that ten-year window rather than waiting until year ten.9IRS. Notice 2024-35, Certain Required Minimum Distributions for 2024
The IRS waived penalties for missed inherited-IRA RMDs from 2021 through 2024. That relief has expired. Starting with the 2025 distribution year, these annual RMDs are mandatory and the standard 25% penalty applies to any shortfall.9IRS. Notice 2024-35, Certain Required Minimum Distributions for 2024 Spouse beneficiaries, minor children, disabled beneficiaries, and beneficiaries not more than ten years younger than the deceased owner follow different schedules. For everyone else, if you inherited an IRA and haven’t been taking annual withdrawals, check whether the original owner had reached their required beginning date. If they had, the five steps above apply to any shortfall from 2025 onward.