Missed an RMD? How the Form 5329 Penalty Waiver Actually Works in 2026

The Penalty Itself Was Already Reduced

Our RMD rules guide covers the age-73 deadline and how the amount is calculated. This article goes deeper into what happens when one is actually missed. SECURE 2.0 cut the excise tax on a missed RMD from 50% of the shortfall down to 25%, and further down to just 10% if the missed amount is withdrawn and corrected within the IRS’s correction window — generally before an IRS notice of deficiency or within two years of the missed distribution, whichever comes first.

How to Actually Request a Full Waiver

Form 5329, Part IX, is where a full penalty waiver is requested. On the dotted line next to the relevant line, write “RC” for reasonable cause along with the dollar amount of the shortfall you’re asking to have waived, and attach a letter explaining the circumstances. Critically, do not pay the excise tax when you submit the waiver request — you’ll only be billed if the IRS actually denies it.

What Actually Counts as Reasonable Cause

Documented examples the IRS has accepted include serious illness, a death in the immediate family, incorrect advice from a custodian or tax professional, and genuine confusion during a real transition period in the rules (the multi-year SECURE 2.0 phase-in created several of these). Simply forgetting isn’t automatically disqualifying, but on its own it’s a weaker case than forgetting paired with fast, voluntary correction once discovered.

Fix It Before You Ask

Take the missed distribution as soon as the error is discovered, before filing the waiver request. Both the reduced 10% penalty tier and a successful reasonable-cause waiver depend on demonstrating you’re “taking reasonable steps to remedy the shortfall” — not on asking for forgiveness while the money is still sitting in the account.

Multiple Missed Years Need Separate Forms

A separate Form 5329 has to be filed for each tax year an RMD was missed — one form can’t combine multiple years. Confusion over which IRAs can be aggregated for RMD purposes is a genuinely common real cause of a missed distribution in the first place; our multiple-IRA RMD aggregation guide covers which account types can and can’t be combined.

The Bottom Line

A missed RMD is a fixable mistake, not an automatic 25% loss. Correcting it quickly and documenting genuine reasonable cause on Form 5329 gives most taxpayers a real shot at a full waiver.

Written by Samuel, Certified Public Accountant

Affiliate Disclosure: This page may contain affiliate links. If you make a purchase or sign up through these links, we may earn a commission at no extra cost to you.