Tax Facts
3903.01 / What special required minimum distribution rules did the IRS 2024 SECURE Act RMD regulations create with respect to spousal elections after the employee’s death?
Under the 2024 final RMD regulations, the surviving spouse will automatically be treated as the participant (without the need to make a special election) if all of the following are true: (1) the surviving spouse is the sole beneficiary, (2) the original participant died before their required beginning date and (3) the surviving spouse will receive payments under the life expectancy rule (rather than the ten-year rule).1
If the original participant died after their required beginning date, the surviving spouse must make a separate election to be treated as though they were that participant.2
This election is only available when the surviving spouse’s first RMD would be in 2024 or later. If the original participant would have reached their required beginning date in 2024 or later, the spousal election is permitted.
Whenever an election to be treated as the original participant is in effect, the Uniform Lifetime Table factor will be used to determine the amount of the surviving spouse’s RMDs up until the year of the surviving spouse’s death. Generally, this will result in smaller annual RMDs when compared to use of the Single Life Table.
Also assuming an election to be treated as the original participant is in effect, upon the surviving spouse’s death, that spouse’s beneficiary must continue to receive distributions based on that spouse’s remaining life expectancy using the Single Life Table if the surviving spouse dies on or after the date they have begun to receive required distributions. The factor is determined using the surviving spouse’s remaining life expectancy in their year of death (based on age), and then reducing that by one for each subsequent year. The surviving spouse’s beneficiary has ten years to empty the account (i.e., they are not treated as an eligible designated beneficiary).
The proposed regulations also propose that, although the spousal election allows the spouse to be treated as the participant for purposes of the RMD regulations, that treatment does not apply in all situations. It would, however, apply so that the spouse would not be subject to the 10% early withdrawal penalty for pre-age-59 ½ distributions. The surviving spouse’s RBD would also be determined by reference to the original participant’s age, rather than the surviving spouse. The proposed regulations also provide that when determining the account balance for RMD purposes, all amounts held in a designated Roth account and any other account under the plan are included for purposes of calculating the RMD for the year.3
1. Treas. Reg. §§ 1.401(a)(9)-3(d), 1.401(a)(9)-3(e).
2. Treas. Reg. § 1.401(a)(9)-5(g)(3)(i).
3. Prop. Treas. Reg. § 1.401(a)(9)-5(g)(3)(ii).
If the original participant died after their required beginning date, the surviving spouse must make a separate election to be treated as though they were that participant.2
This election is only available when the surviving spouse’s first RMD would be in 2024 or later. If the original participant would have reached their required beginning date in 2024 or later, the spousal election is permitted.
Whenever an election to be treated as the original participant is in effect, the Uniform Lifetime Table factor will be used to determine the amount of the surviving spouse’s RMDs up until the year of the surviving spouse’s death. Generally, this will result in smaller annual RMDs when compared to use of the Single Life Table.
Also assuming an election to be treated as the original participant is in effect, upon the surviving spouse’s death, that spouse’s beneficiary must continue to receive distributions based on that spouse’s remaining life expectancy using the Single Life Table if the surviving spouse dies on or after the date they have begun to receive required distributions. The factor is determined using the surviving spouse’s remaining life expectancy in their year of death (based on age), and then reducing that by one for each subsequent year. The surviving spouse’s beneficiary has ten years to empty the account (i.e., they are not treated as an eligible designated beneficiary).
The proposed regulations also propose that, although the spousal election allows the spouse to be treated as the participant for purposes of the RMD regulations, that treatment does not apply in all situations. It would, however, apply so that the spouse would not be subject to the 10% early withdrawal penalty for pre-age-59 ½ distributions. The surviving spouse’s RBD would also be determined by reference to the original participant’s age, rather than the surviving spouse. The proposed regulations also provide that when determining the account balance for RMD purposes, all amounts held in a designated Roth account and any other account under the plan are included for purposes of calculating the RMD for the year.3
1. Treas. Reg. §§ 1.401(a)(9)-3(d), 1.401(a)(9)-3(e).
2. Treas. Reg. § 1.401(a)(9)-5(g)(3)(i).
3. Prop. Treas. Reg. § 1.401(a)(9)-5(g)(3)(ii).
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