Tax information

At age 74 and older, your deadline for taking a required minimum distribution (RMD) is December 31 each year. However, if you're turning 73 this year and it's your first RMD, you have a one-time option to delay taking the first RMD until April 1 of the following year.

When taking a required minimum distribution (RMD), the money you take is taxed as ordinary income and, as a result, may be subject to both federal and state taxes.

When you take a required minimum distribution (RMD), Fidelity withholds 10% of the amount you take for federal taxes—unless you advise us otherwise. You can choose to have us withhold more, or you can opt for no withholding at all, with you assuming responsibility for your full IRS tax bill when filing your tax returns.

The state taxes for required minimum distributions (RMDs) are based on state income tax rates and rules, which vary state to state.

After reaching age 73, required minimum distributions (RMDs) must be taken from these types of tax-deferred retirement accounts:

• Traditional, rollover, SIMPLE, and SEP IRAs
• Most 401(k) and 403(b) plans
• Most small-business accounts [self-employed 401(k), profit sharing plan, money purchase plan]

If you miss taking a required minimum distribution (RMD) by the annual deadline, the IRS could impose a penalty equal to 25% of the amount not taken on time.

Yes, even if you continue working past age 72,* you have to take an RMD from your IRA.

However, you may qualify for an exception from taking RMDs from your current employer-sponsored retirement account, such as a 401(k), 403(b), or small-business account, if:

• You're still working
• You do NOT own more than 5% of the business you work for
• You have an employer-sponsored retirement account with the business you work for

If you meet all the criteria above, you may delay taking an RMD from the account until April 1 of the year after you retire. Keep in mind that this does not apply to IRAs or other accounts you may hold with companies you no longer work for.

If you want to lower your taxable income, consider donating your required minimum distribution (RMD) to charity. A qualified charitable distribution (QCD) is a direct transfer of money from your IRA to an eligible 501(c)(3) charitable organization and will satisfy your IRS requirement.