What is a Required Minimum Distribution (RMD)?
Required minimum distributions (RMDs) is a way to force the IRA/IRA LLC participant to start taking taxable distributions from their IRA once they reach a certain age. RMDs were first required in the 1980s with the passage of the Tax Reform Act of 1986 requiring distributions from IRAs once the participant reached age 70 1/2. The RMD age then increased to age 72 in 2020 with the passage of SECURE ACT 1.0 and then to age 73 with the passage of SECURE 2.0 at the end of 2022.
Age 73 RMD
As a result of the passage of the SECURE 2.0 at the end of 2022, the required minimum distribution (RMD) age increased from 72 to 73 starting January 1, 2023 for IRA participants including those with IRA LLCs.
This means participants who reached age 72 by the end of 2022 were required to make RMDs by April 1, 2023 from their IRAs or IRA LLCs.
However, if the IRA participant reaches age 73 in 2023 or later years, the RMD age will be 73. In other words, nnder Section 107 of the SECURE 2.0 Act, those who reach age 72 after December 31, 2022, can delay beginning RMDs until age 73. In 2033 the RMD age will then increase to age 75.
Roth IRAs including Roth IRA LLCs are still not subject to RMDs.
