How to Report a Missed RMD: Form 5329 and Reasonable Cause

To report a missed RMD, take the shortfall out of your retirement account now, then file IRS Form 5329 for the year you missed the distribution with a written statement asking the IRS to waive the excise tax. The penalty is 25% of the amount you failed to withdraw, drops to 10% if you correct it within the correction window, and can be waived entirely when the miss was due to reasonable error and you’ve fixed it.¹

The SECURE Act 2.0 cut the excise tax from 50% to 25% starting with tax years beginning in 2023. Anything you read that still cites 50% is out of date. The reduced 10% rate applies if you take the corrective distribution and file Form 5329 before the earliest of: the IRS mailing you a deficiency notice, the IRS assessing the tax, or the last day of the second tax year after the year of the miss.² For a 2025 miss, that generally gives you until the end of 2027.

Take the Corrective Distribution First

Before you touch any paperwork, withdraw the missed amount from the retirement account. If you should have taken $10,000 in 2025 and didn’t, withdraw $10,000 as soon as you catch it. This is the “reasonable steps to fix it” half of what the IRS requires for a waiver, and it’s also what qualifies you for the reduced 10% rate if a full waiver isn’t granted.

The corrective distribution is taxable in the year you actually take it, not the year you should have taken it. Your custodian issues a Form 1099-R for the withdrawal, generally with distribution code “7” for a normal distribution, and you report the income on that year’s return.³

Taking the distribution does not by itself erase the penalty. The withdrawal fixes the account; Form 5329 resolves the tax for the year of the miss. You need both.

Calculate the Shortfall

Form 5329 asks for a specific number: the difference between what you were required to take and what you actually took. Your RMD equals your account balance on December 31 of the prior year divided by the life expectancy factor from the IRS Uniform Lifetime Table (or the Joint Life Table if your sole beneficiary is a spouse more than ten years younger).⁴

With multiple traditional IRAs, you calculate each one’s RMD separately, add them, and can pull the total from any one or combination. 403(b) accounts follow the same aggregation rule. 401(k)s do not: each plan must satisfy its own RMD from that specific plan.⁵

Subtract what you actually withdrew from what was required. That’s your shortfall. You’ll need this number even if you plan to ask for a complete waiver, because Form 5329 requires you to enter it.

Fill Out Form 5329, Part IX

Form 5329 is titled “Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.” The section that handles a missed RMD is Part IX, “Additional Tax on Excess Accumulation in Qualified Retirement Plans.”²

Part IX takes three inputs across a handful of lines:

Lines 52a and 52b: the total RMD required for the year, split by account type.
Lines 53a and 53b: the amount you actually distributed.
Lines 54a and 54b: the shortfall, which drives the excise tax calculation.

If you’re requesting a full waiver, write “RC” (reasonable cause) and the dollar amount you want waived in parentheses on the dotted line next to line 54a or 54b. Subtract the waived amount from the shortfall and enter the result on the line itself. For a full waiver, that result is zero.² If you’re claiming the reduced 10% rate rather than a full waiver, enter 10% of the shortfall as the tax due. The total from line 55 carries to Schedule 2, Line 8 of your Form 1040.⁶

Entering zero on the penalty line without a written explanation will not get you a waiver. The letter is what turns Form 5329 from a payment into a waiver request.

Write the Reasonable Cause Statement

The IRS can waive the entire excise tax when the failure was due to reasonable error and you’re taking reasonable steps to fix it.⁷ You demonstrate both by attaching a written statement to Form 5329.

Keep the letter short and factual. Cover four things:

The tax year the RMD was missed.
The exact shortfall amount.
What caused the miss.
When you took the corrective distribution.

Reasons the IRS routinely accepts include an administrative error by your financial institution, a serious illness, the death of a spouse who handled financial matters, or confusion about the rules during your first RMD year. Attach any documentation you have: a custodian letter acknowledging a processing error, medical records, a death certificate, or correspondence showing you requested the distribution on time. Include your account numbers and contact information.

One boundary worth naming: the IRS’s First Time Abate program does not apply here. That program covers failure-to-file, failure-to-pay, and failure-to-deposit penalties under different code sections, not the RMD excise tax.⁸ For a missed RMD, reasonable cause on Form 5329 is the route.

How and Where to File Form 5329

Filing mechanics depend on when you catch the miss:

Before your return is due for that year: attach Form 5329 and your explanation letter to your Form 1040. The tax (or zero, if you’re requesting a full waiver) flows to Schedule 2, Line 8.
After you’ve already filed for that year: file Form 1040-X for the missed year with Form 5329 attached.²
No return filed for that year and none required: file Form 5329 as a standalone document, mailed to the address where you’d normally send a Form 1040. A standalone Form 5329 cannot be e-filed.²

Always use the version of Form 5329 from the year the RMD should have been taken, not the current year’s form. Prior-year forms are on the IRS website. If you missed RMDs across multiple years, file a separate Form 5329 for each year, each with its own explanation letter and supporting documents.

Why You Should File Even If the Miss Was Years Ago

The normal three-year statute of limitations on IRS assessments does not begin to run on the RMD excise tax until you actually file Form 5329 for the year in question. Skip the form and the IRS can discover and assess the penalty ten or twenty years later. Filing starts the clock; after three years from that filing date, the assessment window generally closes.

If you’re discovering a miss from several years back, take the corrective distribution now, file Form 5329 for each affected year using that year’s form, and attach a reasonable cause letter to each. The IRS has been consistent about granting waivers in these late-filed cases when the taxpayer has already corrected the shortfall.

Inherited Accounts Follow the Same Reporting Process

Beneficiaries who miss an RMD from an inherited traditional IRA or other tax-deferred account face the same 25% excise tax, the same 10% reduced rate inside the correction window, and the same waiver process through Form 5329.⁹ Whether you owed an annual distribution in the first place depends on your beneficiary category and the 10-year versus life expectancy rules, which is worth confirming with the custodian before you assume there was a shortfall.

Two automatic waivers can apply on the inherited side. If the original owner died before their required beginning date and you’re an eligible designated beneficiary using life expectancy without having affirmatively elected it, the penalty is waived automatically if you switch to the 10-year rule by the end of the ninth year after the death. The penalty is also automatically waived when a beneficiary takes the deceased owner’s year-of-death RMD by the later of December 31 of the following year or the beneficiary’s filing deadline for that year.⁷ Outside those automatic waivers, the reporting steps are identical to those for original owners.

1
Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
2
Internal Revenue Service. Instructions for Form 5329
3
Internal Revenue Service. Instructions for Forms 1099-R and 5498
4
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
5
Internal Revenue Service. RMD Comparison Chart (IRAs vs. Defined Contribution Plans)
6
Internal Revenue Service. 2025 Schedule 2 (Form 1040)
7
eCFR. 26 CFR 54.4974-1 – Excise Tax on Accumulations in Qualified Retirement Plans
8
Internal Revenue Service. Administrative Penalty Relief
9
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs