RMD Penalty — 25% Excise Tax

What happens when you miss an RMD and how to reduce the penalty to 10%.

Failing to withdraw your full required minimum distribution triggers an excise tax on the shortfall.

Current penalty rates

25% of the amount not distributed (standard)

10% if corrected within the correction window (generally 2 years)

If your RMD is $20,000 and you only withdrew $12,000:

Shortfall: $8,000

Penalty at 25%: $2,000

Penalty if corrected: $800

Withdraw the shortfall amount

File Form 5329 with your tax return

Request penalty abatement if corrected promptly

Use our calculator to determine your exact RMD and avoid penalties.

Try it yourself

Use our calculator with your own numbers.

Get a free review of your required minimum distribution strategy with a qualified advisor.