Miss Your First RMD and the Penalty Is 25%. Here’s the April 1 “First Year” Trap that Catches People Every Year

If you own a traditional IRA, 401(k), 403(b), or any other pre-tax retirement account, the IRS has been patient with you for decades. That patience ends the year you turn 73. That’s when required minimum distributions, or RMDs, kick in, and the rulebook contains a quirk almost nobody explains until it’s too late: your very first RMD is due April 1 of the following year, not December 31. Miss it and the excise tax is a brutal 25% of what you should have withdrawn.

The buried rule almost no one explains

The IRS calls April 1 your “required beginning date,” and it applies only to your first RMD. Every RMD after that is due December 31. Sounds generous, right? It’s a trap. If you push your first distribution into the following calendar year, you’ll owe two RMDs in that same tax year: the delayed one by April 1, and the regular one by December 31. Two taxable withdrawals stacked into 12 months can shove you into a higher federal bracket, spike the taxable portion of your Social Security, and trigger Medicare IRMAA surcharges that follow you for a full year.

The actual law behind it

The RMD framework lives in Internal Revenue Code §401(a)(9), and the current age-73 trigger comes from Section 107 of the SECURE 2.0 Act of 2022. The 25% excise tax sits in IRC §4974, reduced from the old 50% penalty by Section 302 of SECURE 2.0. The IRS spells out the April 1 first-year deadline in Publication 590-B and its official RMD FAQ. If a rule survives that many primary sources, it’s real.

Who this hits, and who is off the hook

The RMD clock starts for owners of traditional IRAs, SEP-IRAs, SIMPLE IRAs, 401(k)s, 403(b)s, and governmental 457(b) plans. If you were born in 1960 or later, your trigger age is 75, not 73, thanks to SECURE 2.0’s phased schedule. Roth IRA owners get a free pass during their lifetime. And starting in 2024, SECURE 2.0 eliminated lifetime RMDs from designated Roth 401(k) accounts too, so those are out. Still working past 73 and don’t own more than 5% of the company sponsoring your 401(k)? You can generally delay RMDs from that specific plan until you retire. IRAs get no such delay.

How to actually use the April 1 window

1. Confirm the year you turn 73 (or 75, depending on your birth year). That’s your “first RMD year.”
2. Ask your custodian to calculate the RMD using your December 31 balance of the prior year divided by the IRS Uniform Lifetime Table factor for your age.
3. In almost every case, take the first RMD by December 31 of your first RMD year, not April 1 of the next year. This keeps one distribution per tax year.
4. If cash flow forces you to delay, take the first RMD in January or February of the following year so it clears well before the April 1 deadline. Never cut it close.
5. Consider a Qualified Charitable Distribution. You can send up to $108,000 in 2025 (indexed annually) directly from your IRA to charity, and it counts toward your RMD without hitting your taxable income.

The catch that eats people alive

The April 1 delay looks like a gift, but taking two RMDs in one year is often the single most expensive tax mistake a new retiree makes. Even worse, if you blow the deadline entirely, the 25% excise tax stacks on top of ordinary income tax on the withdrawal. There is one small mercy: SECURE 2.0 lets you drop the penalty to 10% if you correct the shortfall and file Form 5329 within a two-year correction window. That’s still 10% of a distribution you were going to take anyway.

The default assumption should be simple: take your first RMD in the year you turn 73. Treat April 1 as an emergency exit, not a plan.

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