On Monday, the IRS released the official version of IRS Publication 590-B, “Distributions from Individual Retirement Arrangements (IRAs),” for the 2021 tax season, and the publication’s “What’s New” section leads off with a popular topic: “Life Expectancy Tables Updated.”
The New RMD Tables
I’ve been on the receiving end of questions from readers asking where are the new RMD tables that went into effect in 2022. As of a few days ago, they are available for all to see.
The tables (“life expectancy tables”) are located in Appendix B of Pub. 590-B — but be sure you are looking at the Pub. 590-B that is “for use in preparing 2021 returns.”
Any old Pub. 590-B won’t give you the new tables that apply to “distribution calendar years beginning on or after January 1, 2022.” These new tables were adopted on Nov. 12, 2020.
The tables (Single Life Expectancy, Joint Life and Last Survivor Expectancy, and Uniform Lifetime) are used to calculate required minimum distributions (RMDs) from retirement accounts. In general, since life expectancy has increased, the divisor used to calculate 2022 RMDs for a given age has also increased. For example, a person who is 75 years old who uses Table III (Uniform Lifetime) would have a “distribution period” under the new table of 24.6. That’s the divisor. Under the old table, the divisor was 22.9. For an IRA with a balance of $700,000 on 12/31/2021, the difference in RMD is $28,455 (new table) versus $30,568 (old table).
We’re happy to have the new tables available in an official public release. As always, make sure to check with your tax adviser before you take any actions related to RMDs.
Other Changes: Disaster Distributions and Repayments
As far as other changes, Form 8915-F has replaced Form 8915-E when it comes to “reporting qualified 2020 disaster distributions and repayments of those distributions made in 2021 and 2022, as applicable.” The IRS said that Form 8915-F “is a forever form,” and that beginning in 2021, additional alphabetical Forms 8915 would not be issued. More details on Form 8915-F can be found at IRS.gov.
Another disaster-related change involves taxpayers who have been affected by a federally declared disaster that occurred after Dec. 20, 2019, with those taxpayers possibly eligible for a mandatory 60-day extension for certain tax deadlines (filing or paying income, excise, and employment taxes; and making contributions to a traditional IRA or Roth IRA). More information about recent tax relief can be found at the IRS website page Tax Relief in Disaster Situations.
Qualified Charitable Distributions
New Pub. 590-B also addresses calculation of the maximum annual exclusion for qualified charitable distributions (QCDs), something I’ll address in more detail in another post.
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