RMD Deadline December 31: The 25% Penalty — and the Born-in-1953 Double-RMD Trap

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RMD deadline December 31, 2026: missing a required minimum distribution costs a 25% excise tax, and retirees born in 1953 who delay their first RMD to April 1 stack two taxable RMDs into 2027 — in the article's worked example a deferred $20,000 first RMD becomes $41,000 of taxable income in one year.

RMD Deadline December 31: The 25% Penalty — and the Born-in-1953 Double-RMD Trap

At a glance: A required minimum distribution (RMD) is the smallest amount the IRS makes you withdraw each year from a traditional IRA or workplace plan once you reach age 73 — and for anyone already in the system, the 2026 amount must be out by Thursday, December 31, 2026. Leave money behind and the IRS charges an excise tax of 25% of the amount not withdrawn — 10% if corrected within two years (IRS RMD pages, checked October 25, 2026). One group gets a choice: if you turned 73 in 2026 — born in 1953 — your first RMD may wait until April 1, 2027. But your second RMD is still due December 31, 2027, so waiting stacks two taxable RMDs into one year. In the worked example, a deferred $20,000 first RMD turns 2027's RMD income into $41,000 — and costs about $2,000 in extra federal tax.

Every fall, the same quiet deadline does outsized damage. An RMD is not optional and it is not estimated: it is a specific dollar amount, computed from last December's account balance and an IRS life-expectancy table, and it has to leave the account by a specific date. Miss the date and the penalty — 25% of the shortfall — is one of the steepest in the retirement rules, on top of the ordinary income tax still owed when the money finally comes out. This guide separates the two deadlines that share one calendar page, prices the penalty, and walks through the decision facing this year's first-timers — the born-in-1953 group — whose one-time April 1 option is also a one-way door into a double-RMD year.

Who has an RMD due by December 31, 2026

The IRS's rule: "you generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 73." Age 73 is the starting age SECURE 2.0 set for everyone born from 1951 through 1959 (it rises to 75 for those born in 1960 or later). Which deadline applies depends on where you are in that sequence:

Your situationYour deadline
You were already taking RMDs before 2026Your 2026 RMD must be withdrawn by December 31, 2026. No exceptions, no April grace period.
You turned 73 in 2026 (born in 1953) — this is your first RMD yearYour choice: take the first RMD by December 31, 2026, or delay it — once, and only the first one — until April 1, 2027.
You turned 73 in 2025 and delayed your first RMD to April 1, 2026Your second RMD, for 2026, is due December 31, 2026 — this December is the back half of your own double year.
Your money is in a Roth IRA, or a designated Roth account in a 401(k) or 403(b)No RMD while you are alive. The IRS states this outright; the rules bind your beneficiaries later, not you.

Note the asymmetry in the second row — everything else in this article hangs on it: the April 1 delay exists only for the first distribution. The IRS's own example has the same shape: a withdrawal by April 1 of the next year and another by December 31 of that same year. Every RMD after the first is a December 31 RMD, forever.

The penalty for leaving money in: 25%, or 10% if you fix it fast

Here is the IRS's warning, in its own words: "If you don't take any distributions, or if the distributions are not large enough, you may have to pay a 25% excise tax on the amount not distributed as required (10% if withdrawn within 2 years)." The shortfall is reported on Form 5329, filed with your return for the year the RMD was required.

Price it on real balances:

  • Miss a $20,000 RMD and the excise tax is $5,000. Correct the full amount within two years and it drops to $2,000.
  • Miss a $40,000 RMD — an ordinary size on a mid-six-figure IRA — and the tax is $10,000, or $4,000 corrected in time.
  • The excise tax replaces nothing: you still owe income tax on the distribution when you take it. The penalty is pure loss.

Two mercy rules exist, both on the IRS's RMD FAQ page. First, the 10% rate if the shortfall is withdrawn within the two-year correction window. Second, the penalty "may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall" — claimed by filing Form 5329 with a letter of explanation. A waiver is a request, not a right; the only reliable strategy is the boring one — the money out, in full, on time.

The born-in-1953 trap: the first RMD can wait — the second can't

If you were born in 1953, 2026 is the year you turn 73, and the IRS hands you a genuine option. Your first RMD, for 2026, can be taken any time up to April 1, 2027 — that is the required beginning date the law gives every first-timer, and nothing about it is a trick. The trap is what happens next: your second RMD, for 2027, is due December 31, 2027, and it does not shrink by a dollar because the first one was late. Delay, and 2027 becomes a year with two taxable distributions in it.

Why that matters: RMDs are ordinary taxable income in the year they are received (any part that was already taxed — your basis — excepted, per the IRS). Two in one year means one year's income line carries both. That stack can push a slice of a couple's income into a higher tax bracket — and, because Medicare's income-related premiums are set by your tax return from two years earlier, an unusually high 2027 can also raise the Medicare bill that arrives in 2029 (the two-year lookback our Roth conversion and IRMAA guide works through in full). The next section prices the bracket half of that on one household.

Get the free one-page RMD Deadline Checklist: Before Dec 31 — the deadline that applies to you, the divisor table, and the take-it-out steps on one printable page. Get the free checklist (PDF) → or have it sent to your inbox →.

The trap in dollars: one 1953 retiree, two RMDs, one tax year

(The person below is hypothetical. The deadlines, divisors, penalty rates and bracket lines are the IRS's; balances are round numbers, and the second balance is a stated assumption — real balances move with the market.)

Meet Robert, born in 1953, married, filing jointly. His traditional IRA held $530,000 on December 31, 2025. The IRS computes an RMD as the prior December 31 balance divided by the Uniform Lifetime Table factor for the age reached that year — 26.5 at 73:

The mathThe amount
First RMD (for 2026, at 73)$530,000 ÷ 26.5$20,000
Second RMD (for 2027, at 74)$535,500 ÷ 25.5 (his assumed Dec 31, 2026 balance)$21,000
If he delays the first to April 1, 2027$20,000 + $21,000, both received in 2027$41,000 of taxable income in one year
If he takes the first by Dec 31, 2026$20,000 in 2026; $21,000 in 2027One RMD per year — the stack never forms

Now the tax slice. Suppose Robert and his wife have $84,000 of other taxable income in 2027 — pension, interest, and the taxable part of Social Security, after deductions. At the IRS's published 2026 joint bracket lines (Revenue Procedure 2025-32: 12% tops out at $100,800 of taxable income, 22% above it — the 2027 lines will sit slightly higher, so use this for the shape of the cost, not the last dollar):

  • On-time path: 2027 taxable income = $84,000 + $21,000 = $105,000. Only $4,200 spills into the 22% layer.
  • Delay path: 2027 taxable income = $84,000 + $41,000 = $125,000. Now $24,200 sits in the 22% layer.
  • The difference: the deferred $20,000 lands entirely in the 22% layer instead of the 12% layer — a 10-point gap on $20,000 is about $2,000 of extra federal income tax, paid for the privilege of waiting three months.

And the Medicare echo: at Robert's income, the stack stays well below the joint MAGI line where Medicare surcharges begin ($218,000 for 2026), so his 2029 premiums are untouched. A couple nearer that line faces more — the same $20,000 stack, landing in the wrong year, can cost a full IRMAA tier two years later. Delaying is sometimes still right — an unusually high-income 2026 and a low-income 2027 can flip the math — but it is a decision to make with the numbers on the table.

How your amount is figured — and who is responsible for it

Run your own numbers with our free RMD Calculator.

Three mechanics decide every RMD, all stated on the IRS's pages:

  • The formula. Prior December 31 balance ÷ the distribution period from the Uniform Lifetime Table (Table III of Publication 590-B). The factor shrinks each year — 26.5 at 73, 25.5 at 74, 24.6 at 75, 20.2 at 80 — so the required share of your account rises as you age. (A spouse who is your sole beneficiary and more than 10 years younger means a different, gentler table.)
  • Per account, then combined — sometimes. The RMD is calculated separately for each account. With several IRAs, you may withdraw the total from one of them. 401(k) and 457(b) plans are stricter: each plan's RMD must come out of that plan. (403(b) contracts can be combined with each other, like IRAs.) Taking "the right total" from the wrong kind of account is a real way to miss.
  • Your custodian helps; you are liable. Your IRA trustee must report your RMD amount to you (it appears in Box 12b of Form 5498, or the custodian offers to calculate it) — but the IRS FAQ is blunt that "the account owner is ultimately responsible for taking the correct RMD amount." And two quiet rules from the same page: extra taken this year cannot be credited against next year's RMD, and an RMD cannot be rolled over into another tax-deferred account.

Still working? Roth accounts? The exceptions, exactly as far as they go

  • Still working with a 401(k): you can generally delay that plan's RMDs until the year you retire, if your plan allows it. The exception dies for 5% owners of the sponsoring business, who start on the normal schedule — and plan documents govern: a plan may require distributions at 73 even while you work.
  • Still working with an IRA: no exception at all. The IRS's comparison chart says it in one line — an IRA owner must take the first RMD by April 1 after turning 73 "even if you're still employed."
  • Roth money: no lifetime RMDs for the owner — Roth IRAs never had them, and under SECURE 2.0 the designated Roth account inside a 401(k) or 403(b) is exempt while the owner is alive as well. (Your beneficiaries play by different rules, in a different guide.)
  • Charitable? If you are 70½ or older, a qualified charitable distribution (QCD) — money sent directly from your IRA to an eligible charity — counts toward your RMD and is excluded from your income, up to $111,000 per person for 2026 (IRS Notice 2025-67). For givers, it is the cleanest way to satisfy the deadline.

December has two deadlines — and the second one has a line at the window

December 2026 asks two different things of the same readers. Plan changes for 2027 coverage close first — December 7, the end of Medicare open enrollment (our Part D 2027 guide covers what is changing and why re-shopping matters this year). The RMD closes the month on December 31. The practical trap is administrative, not legal: custodians process year-end requests in order, under load, with holidays in the middle. An RMD is satisfied when the money is distributed, not when you meant to ask — so have the withdrawal requested and confirmed in early December. There is no prize for waiting: the distribution's tax year is set by when it leaves, and December 31 does not move.

Don't leave the 25% on the table: the free RMD Deadline Checklist: Before Dec 31 puts your deadline, the divisor mini-table, the account-by-account rules, and the fix-it steps on one printable page. Get the free checklist (PDF) → or have it emailed to you →.

Frequently asked questions

I turned 73 in 2026. Is my first RMD due December 31, 2026, or April 1, 2027?

Either — the one real choice in this system. Your first RMD, for 2026, may be taken by April 1, 2027. But your 2027 RMD is still due December 31, 2027, so delaying puts two taxable distributions into 2027 (priced in the worked example above). If 2026 is your lower-income year, take it in 2026.

I missed the deadline. What exactly happens, and can I fix it?

The amount not withdrawn is subject to a 25% excise tax (IRS RMD page and FAQ Q8). Withdraw the full shortfall within two years and the rate drops to 10%. Report it on Form 5329 with your return for the year the RMD was required. The IRS may also waive the penalty if the shortfall was due to reasonable error and you are taking reasonable steps to remedy it — file Form 5329 with a letter of explanation (FAQ Q9). What you cannot do is nothing: the 25% stands and the distribution is still owed.

Can I take my whole RMD from one account?

From your IRAs, yes — calculate each IRA's RMD separately, then withdraw the total from one or more of them. From 401(k) or 457(b) plans, no — each plan's RMD must come from that plan. 403(b) contracts can be totalled and taken from any one of them. (IRS FAQ Q5.)

Does my Roth 401(k) have an RMD?

No — not while you are alive. The IRS states that withdrawals are not required from Roth IRAs or designated Roth accounts in a 401(k) or 403(b) during the owner's lifetime. Beneficiaries are subject to RMD rules after the owner's death.

I'm 73 and still working. Can I wait?

For a workplace plan, generally yes — until the year you retire, if the plan allows it — unless you own 5% or more of the business, in which case you start on schedule. For an IRA, no: the IRS's chart requires the first IRA RMD by April 1 after you turn 73 "even if you're still employed."

Can a charitable gift satisfy my RMD?

Yes, if it is a qualified charitable distribution: you are at least 70½, the money goes directly from your IRA to an eligible charity, and it counts toward your RMD while staying out of your taxable income — up to $111,000 per person in 2026 (IRS Notice 2025-67). A check you write yourself does not qualify; the transfer must be direct.

Sources & official figures

  • Internal Revenue Service — Retirement topics: Required minimum distributions (RMDs) (checked October 25, 2026): withdrawals begin at age 73; first RMD due April 1 of the following year, later RMDs by December 31; the first year following age 73 carries two distribution dates; the excise tax — "25% … (10% if withdrawn within 2 years)" — on Form 5329; the balance ÷ Uniform Lifetime Table formula; no lifetime RMDs from Roth IRAs or designated Roth accounts: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds
  • Internal Revenue Service — Retirement plan and IRA required minimum distributions FAQs (checked October 25, 2026): plan participants may delay until retirement unless a 5% owner; per-account calculation and aggregation rules; the owner is ultimately responsible; the penalty and the reasonable-error waiver; excess cannot be credited to a future year; RMDs cannot be rolled over: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions
  • Internal Revenue Service — RMD comparison chart (IRAs vs. defined contribution plans) (checked October 25, 2026): the IRA "even if you're still employed" rule; the 5%-owner rule: https://www.irs.gov/retirement-plans/rmd-comparison-chart-iras-vs-defined-contribution-plans
  • Internal Revenue Service — Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs), Appendix B, Table III (Uniform Lifetime Table) and chapter 1: age 73 → 26.5, 74 → 25.5, 75 → 24.6, 80 → 20.2; the trustee's duty to report your RMD amount (Form 5498); QCD mechanics: https://www.irs.gov/publications/p590b- Internal Revenue Service — Revenue Procedure 2025-32 (October 9, 2025): the 2026 joint bracket lines used in the worked example — 12% up to $100,800 of taxable income, 22% above it.
  • Internal Revenue Service — Notice 2025-67: the 2026 QCD exclusion limit of $111,000 per person.

Last updated: October 25, 2026 — checked against IRS sources on October 25, 2026. If the IRS republishes its RMD guidance or issues a December reminder with new language, the affected lines above are refreshed the same day.

Disclaimer: The Retirement Desk publishes education, not financial, tax, or legal advice. The worked example is a labelled hypothetical with round balances and a stated balance assumption; your RMD, bracket, and Medicare premium depend on your accounts and your return, and the IRS and your plan documents are the authorities on them. For a missed deadline or a penalty notice, a tax professional can review your Form 5329 and waiver request.

Filed under: RMD — The Retirement Desk, the situation-first retirement money desk for Americans 60–75.

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