[1] Retirement planners, tax practitioners, and publications of the Internal Revenue Service (IRS) often use the phrase "required minimum distribution".
Unlike most distributions from IRAs and qualified plans, RMDs are never eligible for rollover; they must be withdrawn.
Income tax is generally not due on any part of the RMD from an IRA which is paid to a charity.
Although the rules require RMDs to begin by April 1 of the year after the individual reaches age 72,[a] participants in an employer-sponsored plan can usually wait until April 1 of the year after retirement (if later than age 72[a]) to begin distributions unless the individual owns 5% or more of the employer who is sponsoring the plan.
Legislation passed in 2006 allows qualified retirement plans to be amended to offer a "nonspouse rollover".
If a decedent has named his/her estate or a charity as a beneficiary and the 5-year rule applies, no "stretch" payout is possible.
If an estate or charity is a beneficiary of a part of the account, the same holds true unless certain remedial measures are taken by September 30 of the year after death.
If the decedent died before age 72[a] and the beneficiary does not start a lifetime payout by the end of the year after the death, the 5-year rule does apply.
[7] The nonspouse rollover rules were passed in Section 829 of the Pension Protection Act of 2006 and interpreted by IRS Notice 2007-7, 2007-5 IRB 1.