SECURE 2.0 cut the penalty for a missed RMD sharply — but the difference between correcting it in time and not is still a real 15 percentage points.
How it works
The base excise tax on a missed RMD shortfall is 25%. Correcting the shortfall — taking the missed amount and filing Form 5329 reflecting it — within the correction window under IRC §4974(e)(4) drops the rate to 10% instead.
What this does not include
The IRS has also granted broader penalty waivers in various years for specific RMD situations (including some inherited-IRA annual RMDs under the SECURE Act’s 10-year rule) — current relief should be checked, since it can eliminate the penalty entirely in situations this calculator doesn’t track.
How to use this calculator
- Enter the RMD shortfall amount.
- Indicate whether it was corrected within the IRS correction window.
Frequently asked questions
What is the correction window?
Per IRC §4974(e)(4), it runs from the original RMD due date until the earliest of an IRS deficiency notice, an IRS tax assessment, or the end of the second tax year following the year the RMD was missed.
Do I have to pay the penalty even if I correct the shortfall?
Correcting it in time reduces the rate from 25% to 10% rather than eliminating the tax — though the IRS can waive it entirely in certain circumstances with a reasonable-cause explanation.
How do I report a missed RMD?
File Form 5329 with your federal tax return, computing the excise tax and indicating whether the reduced 10% rate applies.
