IRS Form 5329 · Correction Steps · June 2026
The fix for a missed inherited IRA RMD usually comes down to three steps: confirm whether a distribution was actually required for that year, withdraw the required shortfall if one existed, and file Form 5329 for the year the RMD was due. The IRS may impose a 25% excise tax on the shortfall, and that can be reduced to 10% if corrected within the IRS correction window.
To fix a missed inherited IRA RMD, do this in order:
That sequence matters because some inherited IRAs do not work like a simple annual-RMD account. In some cases, the issue is not a "missed annual RMD" at all, but a different inherited distribution deadline.
Before you calculate penalties or withdraw money, confirm that an inherited IRA distribution was actually required for the year you missed. IRS beneficiary rules depend on who inherited the account, what type of IRA it is, and when the original owner died.
A spouse beneficiary often has more options than a non-spouse beneficiary. A non-spouse beneficiary is more likely to be under the inherited IRA rules that were reshaped by the SECURE Act, including the 10-year rule for many beneficiaries.
"Inherited IRA" does not automatically mean "annual RMD every year." In some inherited IRA setups, the main requirement is that the account be fully distributed by a deadline, not that you take the same kind of annual RMD you would from your own traditional IRA.
For many non-spouse beneficiaries, the SECURE Act introduced the 10-year rule, which means the inherited account must usually be emptied within 10 years. But that does not always mean there is an annual RMD in every year of that 10-year period.
That is the key reason people sometimes think they "missed" an RMD when the IRS framework may not have required one for that year.
The IRS has referenced relief under Notice 2022-53 for certain failures to take correct RMDs in 2021 and 2022 involving inherited accounts subject to the 10-year rule. If your missed year was 2021 or 2022, stop and verify relief before assuming the 25% excise tax applies.
If an RMD really was required, the missed amount is the shortfall: the required distribution minus what you actually took. Where the beneficiary rules require an annual RMD, the RMD generally uses the prior December 31 account balance divided by an applicable factor from IRS guidance and Publication 590-B tables.
The IRS method uses the IRA's prior year-end balance — typically the balance as of December 31 of the previous year — for the year the distribution was required. If you use the wrong balance date, your calculation can be off.
| Item | Example value |
|---|---|
| Prior Dec. 31 balance | $100,000 |
| IRS factor | 20.0 |
| Required distribution | $5,000 |
| Amount actually taken | $2,000 |
| Shortfall | $3,000 |
Once you know the amount that should have been withdrawn, take that amount from the inherited IRA. This does not erase the mistake by itself, but it corrects the cash flow issue and helps position you for the proper tax filing.
The IRS says you should file Form 5329 with your federal income tax return for the year the full required RMD was not taken. That form is where the missed-RMD excise tax is reported. If you believe you qualify for a waiver or reduction, the supporting explanation generally has to be handled through the filing process and documentation.
Keep:
If the IRS ever asks questions, documentation matters.
If an inherited IRA RMD was required and you missed it, the IRS generally applies a 25% excise tax to the shortfall. The IRS guidance also says that if you correct the failure within two years, the excise tax can be reduced to 10%.
The excise tax is based on the amount not withdrawn by the due date, not the whole account balance. So if your required RMD was $4,000 and you took $3,000, the shortfall is $1,000. The penalty framework applies to that $1,000 shortfall.
The sooner you correct the issue, the better your position may be under the IRS rules. That is why it helps to fix the missed distribution first and then sort out the reporting.
Penalty exposure depends on two things: (1) Was a distribution actually required that year? (2) Does any IRS relief apply? That is why the first step is always to confirm the inherited IRA rule that governs your situation.
Form 5329 is the IRS form used to report additional tax related to a missed RMD. The IRS says it should be filed with the return for the year the RMD was required but not taken.
Form 5329 helps show:
One common mistake is attaching the reporting to the wrong tax year. The IRS language is tied to the year the RMD was required but not taken, not just the year you discovered the problem.
If the missed inherited IRA RMD happened in 2021 or 2022, verify whether IRS transition relief applies before you assume you owe the normal excise tax. The IRS has referenced relief for certain failures tied to the SECURE Act 10-year rule, but this relief is limited to specific inherited-account RMD failures described in IRS guidance — it is not automatic for every 2021/2022 inherited IRA missed distribution.
If the answer is yes, check the IRS relief guidance before filing as though the full excise tax automatically applies.
Not true. Some inherited IRA situations follow the 10-year rule or other framework that does not work the same way as your own IRA.
RMD calculations generally use the prior December 31 balance. Using a different date can change the result.
The IRS table depends on the specific beneficiary category and situation. Different beneficiary categories may use different IRS tables or methods from Publication 590-B.
Form 5329 must be filed for the year the RMD was required, not the year you corrected it.
The IRS has issued year-specific relief for certain years. Assuming the full 25% rate applies without checking relief notices can lead to overpaying.
Correction does not automatically eliminate the need to report the issue or request a waiver.
Confirm whether an inherited IRA distribution was actually required for that year. IRS beneficiary rules depend on who inherited the account, what type of IRA it is, and when the original owner died. Some inherited IRAs under the 10-year rule may not have an annual RMD for certain years.
Yes, in most cases. The IRS says you should file Form 5329 with your federal income tax return for the year the full required RMD was not taken. That form is where the missed-RMD excise tax is reported, and where you request a waiver if you believe you qualify.
Yes. The IRS guidance says that if you correct the failure within two years, the excise tax can be reduced from 25% to 10%. This is why correcting promptly matters. The exact rate depends on your facts and when correction happens.
If the missed year was 2021 or 2022, verify whether IRS transition relief applies before assuming you owe the normal excise tax. The IRS has referenced relief under Notice 2022-53 for certain failures tied to the SECURE Act 10-year rule. This relief is limited to specific inherited-account RMD failures described in IRS guidance — it is not automatic for every 2021/2022 missed distribution.
Keep custodian statements, proof of the distribution you took, your shortfall calculation, any notes showing why the RMD was missed, and beneficiary and inheritance documents. If the IRS reviews the request later, documentation is critical.