IRS Notice 2022-53: What You Need to Know

Key Takeaways

• If you inherited a retirement account from someone who died after their required beginning date (April 1 following the year they turn 72) and didn't take RMDs in 2021-2022, you can qualify for an automatic excise tax waiver under Notice 2022-53—but only if you're a plain designated beneficiary or successor beneficiary, not an eligible designated beneficiary
• Determine your beneficiary classification and the account owner's death date relative to their required beginning date, as these factors determine whether you must take annual RMDs while also having 10 years to empty the account
• No catch-up RMDs are required for 2023 if you missed prior years under the waiver, but consult a tax adviser about whether to spread inherited account distributions over 10 years or take larger amounts in specific years based on your tax bracket
• If you're an eligible designated beneficiary (surviving spouse, minor child, disabled, chronically ill, or less than 10 years younger than the account owner), you don't qualify for the automatic waiver and must have a reasonable cause explanation to request individual relief from the IRS
• Multiple deaths in the beneficiary chain create two separate 10-year periods to track: successor beneficiaries must continue the original beneficiary's life expectancy distribution schedule while still emptying the account within 10 years of their inheritance