IRA RMD Statement Requirements
By Alexis Gonzalez-del-Valle, CIP, CHSP
Who receives the annual IRA required minimum distribution (RMD) statement?
The financial organization provides RMD statements to Traditional and SIMPLE IRA owners if a distribution is required to be taken from the IRA for the year and the IRA owner is alive at the beginning of the year. The requirement for RMD statements does not apply to beneficiaries who are taking required distributions or to Roth IRAs. Although the RMD statement requirement does not apply to IRA beneficiaries, if the surviving spouse beneficiary of an IRA owner is the sole beneficiary of an IRA and decides to treat the IRA as his own, the financial organization should report the RMD information to the surviving spouse as the new IRA owner.
What is the deadline to provide the RMD statement to the IRA owner?
The financial organization holding the IRA as of December 31 of the prior year must provide an RMD statement to the IRA owner by January 31 of the year for which the distribution is required. If the deadline lands on a Saturday, Sunday, or legal holiday, the deadline will be on the next business day. The RMD statement may be provided along with the fair market value statement, which also must be provided to the IRA owner by January 31.
What information must be included in the RMD statement?
Financial organizations may choose one of two reporting alternatives for the RMD statement.
Alternative #1: The financial organization provides the statement to the IRA owner, reporting the RMD amount for the calendar year and the date by which the RMD must be distributed. The RMD may be calculated using the IRA owner’s age and the Uniform Lifetime Table. The account balance should not be adjusted for any amount received after December 31 of the prior year.
Alternative #2: The financial organization provides a statement to the IRA owner that informs the IRA owner that an RMD is due for the calendar year, notifies the IRA owner of the deadline by which the RMD must be distributed, and includes an offer to provide, upon request, the RMD amount.
Under Alternative #2, if the IRA owner requests an RMD calculation, the financial organization must provide the RMD amount to the IRA owner.
Under both alternatives, the RMD statement must notify the IRA owner that the financial organization will report to the IRS that the IRA owner is required to receive an RMD for the year. The RMD generally is calculated by taking the prior-year’s December 31 balance and dividing it by the IRA owner’s applicable denominator, which is taken from the Uniform Lifetime Table.
IRS Notice 2003-3 allows for some flexibility in the use of Alternatives #1 and #2 when providing RMD statements to IRA owners. Thus, financial organizations may use Alternative #1 for some RMD statements and Alternative #2 for the remaining statements.
Can the financial organization provide RMD statements electronically to IRA owners?
Yes. IRS Notice 2003-3 provides guidance on how financial organizations may provide RMD statements electronically to IRA owners. Financial organizations may provide RMD statements electronically if procedures that apply to the electronic transmission of Forms W-2, Wage and Tax Statement, are followed, including the consent requirement described in Treasury regulations under Internal Revenue Code (IRC) Sec. 6051. The procedures are included in Part M of the IRS’s General Instructions for Certain Information Returns.
May Form 5498 be used to satisfy the RMD statement requirement?
A financial organization may use Form 5498, IRA Contribution Information, to satisfy the RMD statement requirement if the form is provided to the IRA owner by the January 31 RMD statement deadline. If a financial organization uses Form 5498 as the RMD statement, it should enter the date by which the RMD has to be distributed in Box 12a, RMD date, and the RMD amount in Box 12b, RMD amount. When a financial organization uses Form 5498 as the RMD statement, the financial organization may need to submit a revised Form 5498 if the IRA owner makes a prior-year contribution after the RMD statement is sent.
What RMD information does a financial organization report to the IRS?
If an IRA owner is required to take an RMD in the year Form 5498 is received, the financial organization must check Box 11 of Form 5498. For instance, if an IRA owner has an RMD due for 2026, the financial organization must check Box 11, Check if RMD for 2026, on the 2025 Form 5498, which is received by both the taxpayer and the IRS in 2026. Financial organizations are not required to report RMD amounts or due dates to the IRS.
