Here's the short question -- a participant's first RMD is due on or before April 1, 2007. How far back can you go to determine if the full RMD was distributed?

Here's the longer fact situation -- Participant turned 70 1/2 in 2006, therefore, her required beginning date is April 1, 2007, and she must receive her first RMD on or before April 1, 2007. The way I read the regs, that RMD is the "distribution required for the employee's first distribution calendar year." (1.401(a)(9)-5 A-1© ) The employee's "first distribution calendar year" is the year in which the employee attains age 70 1/2 -- in this case 2006. (A-1(b) ) Participant received distributions in 2006 exceeding the value of the RMD due to her on or before April 1, 2007. Has she fulfilled the requirement?

I understand that in subsequent years, she can not "carry forward" any distributions in excess of her RMD to apply in future years (in other words, if she received more distributions in 2007 than is required, she could not apply the excess to satisfy her RMD in 2008). But it makes sense to me that if this first RMD is essentially for calendar year 2006 (even though it is not required to be taken until April 1, 2007) the "on or before" language would include distributions taken in 2006.

Does anyone agree? Disagree? Have an on-point reg that you can cite for me?

Agree. The regs on 401(a)(9) state exactly what you have stated.

"Participant received distributions in 2006 exceeding the value of the RMD due to her on or before April 1, 2007. Has she fulfilled the requirement?"


Were the distributions made in 2006 paid directly to her or were they direct rollovers? If paid directly to her, did she rollover any of those distributions within 60 days of receipt? RMDs are not eligible for rollover so you must be sure.

Under the regs., the first distributions made in 2006 should have been used to satisfy the RMD for that year. If the rules are followed, you do not have this issue. (1.402©-2, Q&A-7).

Thanks, your responses were very helpful! The distributions made in 2006 were paid directly to the participant and were not treated as rollovers, so she should be fine.