What Happens If You Don't Take Your RMD?

Cardio Renal Foundation is a 501(c)(3) tax-exempt charity organization. Your donation advances our mission to provide a solution beyond dialysis.

Maybe the year got away from you. Maybe the letter from your custodian sat in a pile, or the amount looked wrong, or you simply could not face the tax bill and quietly hoped December would forget. Whatever the reason, the year has turned and the required minimum distribution — the withdrawal the IRS makes you take from your IRA — did not happen, or did not happen in full. This page answers the question plainly: what happens now, what it costs, and how the fix works. The honest headline first: it is fixable, it is a mistake the IRS sees constantly, and fixing it quickly is worth real money.

The Short Answer: A Tax on the Amount You Didn't Take

The consequence is a special penalty tax — the IRS calls it an excise tax — of 25% of the shortfall: the difference between the amount you were required to take out and the amount you actually took. If your required withdrawal was $8,000 and you took none of it, the tax is figured on the full $8,000 — $2,000 at the 25% rate. If you took $5,000 of it, the tax is figured only on the $3,000 you missed. (Until 2023 the rate was twice as steep — 50% — before the SECURE 2.0 law cut it to 25%.)

Two softenings matter, and both reward speed. First, if you correct the mistake promptly — take the missed amount out and file the paperwork inside what the IRS calls the correction window, which generally runs until the end of the second tax year after the year the tax applies, or until the IRS contacts you about it, whichever comes first — the rate drops from 25% to 10%. Second, the IRS can waive the tax entirely if the miss happened for a reasonable reason and you have fixed it. Both roads run through the same fix, described next.

How the Fix Works

Step one: take the missed amount out now. Call your custodian and withdraw the shortfall as its own, separate distribution, as soon as you discover the miss. This is the step everything else stands on — the IRS forgives mistakes that have been repaired, not mistakes that are still sitting there. Note honestly what this costs: the withdrawal is taxed as income in the year you take it out, just as it would have been last year. The penalty is about when it came out, and the income tax itself was never avoidable.

Step two: file Form 5329 for the year of the miss. This is the IRS form — "Additional Taxes on Qualified Plans" — where the penalty is reported, in its Part IX. If the miss was an honest error, this is also where you ask for mercy: you write "RC" (for reasonable cause) next to the amount, attach a short written explanation of what happened — illness, a custodian's error, bad advice, a death in the family; plain facts, a few sentences — and show the tax as waived if the IRS agrees. You do not pay the penalty up front on the amount you are asking to have waived; if the IRS says no, they will bill you. One form is filed for each year in which a withdrawal was missed. Many honest, promptly fixed mistakes are waived in full, which is why the explanation letter is worth ten careful minutes.

Step three: do not miss this year while fixing last year. The deadline did not move. This year's required withdrawal is still due by December 31, in full, on its own. If you repair last year's miss in the same calendar year, you will take two years' withdrawals in one year — the missed one and the current one — and both land in that year's income. That is not a reason to delay the repair; the 10% correction rate and the waiver both depend on promptness. It is simply worth knowing before the year surprises you.

Why Skipping Is Never a Strategy

Every so often the question underneath this page is not I forgot but can I just not? — so that version deserves a straight answer too. Skipping on purpose buys nothing. The penalty repeats: any amount still untaken is taxed again in each year it remains untaken. The income tax itself is not avoided, only postponed — the money is taxed whenever it finally comes out, so the "saving" is an illusion with a 25% surcharge attached. And the required amount keeps being figured every year on whatever balance remains, so a deliberate skip does not shrink the obligation; it compounds it. The IRS designed this penalty, back when it was 50%, precisely to make ignoring the rule the most expensive option on the table. At 25% it still is.

If the mechanics underneath all of this — when these withdrawals begin, how your amount is figured from the IRS table, the deadline rules — are the homework in front of you, the full walk-through is here: what is a required minimum distribution (RMD)?

If the Real Reason Is That You Don't Want the Money

One more thing deserves saying on this page, because it is the reason a share of these misses happen. Some people let the deadline slide not from forgetfulness but from dread: the money is not needed, and the tax on it feels like a fine for saving well. If that is your situation, the fix above handles last year — but for the withdrawals still ahead of you, there is a door worth knowing about. A qualified charitable distribution, or QCD, sends money directly from your IRA to a qualified charity. It counts toward your required withdrawal, dollar for dollar — the IRS is satisfied in full — but because the money never becomes your income, no income tax is owed on it at all. It cannot rewind a year already missed; that amount still has to come out and be reported the plain way. From this year forward, though, it is the way to satisfy a withdrawal you don't want without the part you dread. The situation it answers is exactly this one, and we wrote it up here: I don't need the money — do I still have to take my RMD?

Why This Foundation

If the charity door is the door you choose — for this year's withdrawal or a later one — here is this Foundation's answer, in one paragraph. The Cardio Renal Foundation exists for the people living with kidney and heart disease, and its conviction is plain: dialysis should not be a life sentence. The gifts that arrive here keep a library of plain-words health articles and a shelf of free everyday tools — grocery lists, calendars, recipe boxes — free for the seniors who rely on them, and they carry forward the work of finding a way beyond dialysis. A QCD has one more virtue worth naming: because no tax is taken out of it on its way, the full amount you send is the amount that arrives — every dollar of it goes straight to work.

Stated Plainly

Stated plainly, because a money page owes you the same honesty as any other kind: this page explains how the rules work in general. It is not advice about your return. Your own picture — other income, a workplace plan, state taxes, a spouse's separate accounts — can change the details, and a qualified tax advisor who knows your situation is the right referee for your own numbers. And what can be checked, check: our legal name is Cardio Renal Foundation Inc, our EIN is 33-4359765, and we are a qualified 501(c)(3) tax-exempt organization — verifiable in the IRS records by anyone, in about three minutes, and we would rather you checked than took our word.

A missed withdrawal is one of the most common and most repairable mistakes in retirement paperwork — what matters is that it gets repaired. Questions reach a person here, at donations@cardiorenalfoundation.org or (646) 770-3946.

This article is informational only and is not tax, legal, or financial advice. Charitable giving and tax rules change and depend on your individual circumstances; consult a qualified tax advisor or attorney about your own situation.