ALS

Agree correcting the 1099-Rs is the appropriate 'fix'. We find that most times the checkwriter refuses to do that because that's not how the payment was physically made. Also, when the person does remove the excess contribution from the IRA, what type of 1099-R do they get from the IRA...does it indicate it's not taxable because the distributing institution should be providing a 1099-R for the RMD portion indicating it was taxable.

The SECURE Act changed RMDs for nonspouse beneficiaries to the 10 year rule, unless you're an eligible designated beneficiary (EDB). Other than a spouse, that's someone who is a minor child, disabled, chronically ill, or an individual not more than 10 years younger than the participant. We interpreted the last one to be someone younger, but not by more than 10 years. A client interprets that to also include any nonspouse beneficary who is older than the participant because they are 'not more than 10 years younger'. That would mean the 10 year rule only applies to a nonspouse more than 10 years younger than the participant (not including minor children). How have others interpreted this?

Prior to the SECURE Act, plans could choose which beneficiaries to apply the 5-year rule to. The default was to only nonperson nonspouse beneficiaries. Some plans would apply it to all nonspouse beneficiaries. With the SECURE Act, can plans apply the 10 year rule to all nonspouse beneficiaries, including eligible designated beneficiaries (EDBs)? Or must EDBs receive RMDs starting the year after death?

What if it got rolled to another qualified plan and that plan had to distribute it? Looking at the 1099-R instructions, is P only for IRAs to use? I've never fully understood how this should work so that the participant doesn't get two taxable 1099-Rs.

I realize you're supposed to correct the 1099-R into two...one for the rollover and one for the RMD as a taxable payment per the 1099-R instructions. So the participant will pay taxes on what should have been the RMD. Now, when the IRA removes it (with earnings) how does the reporting for that work so that the participant doesn't get two 1099-Rs for the RMD?