RMD If You Still Work: 5% Owner Rule and Roth 401(k) (2026)

Which of your accounts get the delay

The rule is written for one kind of money: a qualified plan, such as a 401(k) or profit-sharing plan, at the employer you still work for. Everything else follows the age rule. The table sorts the usual accounts of someone past 73 who is still earning.

Source: 26 U.S.C. 401(a)(9) and 402A, 26 CFR 1.401(a)(9)-2, Pub. L. 117-328, IRS Retirement plan and IRA required minimum distributions FAQs (page last reviewed January 29, 2026). The former-employer row and the governmental-plan reading of clause (iv) are our reading of the text. We did not verify from a primary text that 403(b) and 457(b) plans use the same retirement delay; ask the plan.

Two plan-level facts matter. The IRS says in Publication 575: “your plan may require you to begin to receive distributions by April 1 of the year that follows the year in which you reach age 73 even if you haven’t retired.” So the delay is a plan option, not a right, and the plan document decides. And the regulation covers a plan maintained by several employers: an employee who retires from one of them but keeps working for another “is not treated as having retired” (1.401(a)(9)-2(b)(5)).

Because every 401(k) is its own account, the IRS FAQ says that RMDs from 401(k) and 457(b) plans “must be taken separately from each of those plan accounts.” You cannot take the old-plan RMD from the IRA. Only IRAs can be combined with other IRAs. The basic division and the table behind it are on our RMD table page.

Who counts as a 5 percent owner

Publication 575 states it plainly. You are a 5% owner if, for the plan year ending in the calendar year you reach the applicable age, you own (or are treated as owning under section 318) more than 5% of the outstanding stock or voting power of the employer, “or more than 5% of the capital or profits interest in the employer.” The Code, in section 416(i)(1)(B)(i), makes the same split: a corporation is tested on stock and voting power, any other employer on capital or profits interest.

Three points are easy to miss.

• Family counts. Section 318(a)(1)(A) treats you as owning the stock of your spouse (other than a spouse legally separated by decree), your children, grandchildren and parents. A spouse’s 3% counts toward your 4%, which makes you a 7% owner. Siblings are not on the list.
• Companies look through at 5%. Section 416(i)(1)(B)(iii)(I) applies the corporate attribution rule of section 318(a)(2)(C) with “5 percent” in place of “50 percent.” So if you own 5 percent or more in value of a corporation that holds shares of your employer, you are treated as owning that proportion of those shares.
• The test date is one plan year. The regulation tests ownership “with respect to the plan year ending in the calendar year in which the employee attains the applicable age.” It does not say what happens if you buy or sell shares later. We did not find that answered in the text we read, so ask the plan administrator in writing.

A solo owner of a one-person company owns 100%, so for a solo 401(k) the age rule is the rule. Our solo 401(k) comparison lists the same age rule in its RMD row.

Applicable age: 73 or 75

The statute sets 73 for someone who “attains age 72 after December 31, 2022, and age 73 before January 1, 2033” and 75 for someone who “attains age 74 after December 31, 2032” (401(a)(9)(C)(v)). The final regulation, amended by T.D. 10001, turns that into birth years in 1.401(a)(9)-2(b)(2):

Source: 26 CFR 1.401(a)(9)-2(b)(2) and (b)(3)(i). The years are our arithmetic. Our RMD table page covers the 1959 gap in more detail.

Case 1: a 2 percent owner who consults past 73

Our assumptions: born 1953, 73 in 2026, still on the payroll of a company in which the person owns 2%, and the plan allows working participants to wait. Balances at December 31, 2025: current 401(k) $900,000; 401(k) from an employer left years ago $400,000; traditional IRA $600,000. The Uniform Lifetime divisor at 73 is 26.5 (26 CFR 1.401(a)(9)-9(c); the same number is in Table III of Publication 590-B).

Our arithmetic. The delay removes $33,962.26 ($900,000 / 26.5) from the 2026 requirement. 2026 is the first RMD year for the old 401(k) and the IRA, so either may be paid by April 1, 2027 instead of December 31, 2026 (26 CFR 1.401(a)(9)-5(a)(3)), which would stack on top of the 2027 amounts.

This is why a person in this position can still owe an RMD. If the old 401(k) and IRA were moved into the current plan, the working-years delay would apply to them too, because all of an employee’s accounts under one plan are aggregated (1.401(a)(9)-5(b)(1)). Two limits are in the primary texts. The year’s RMD cannot be rolled over; the IRS FAQ answers “No” and Publication 590-B says “You can never make a rollover contribution of a required minimum distribution.” And a rollover from an IRA into a plan can include only the taxable portion (26 U.S.C. 408(d)(3)(A)(ii)). Whether the plan accepts such rollovers is in its document, which we have not seen. Our 401(k) rollover page covers the 60-day and withholding mechanics.

Case 2: a 5 percent owner by family attribution

Our assumptions: born 1953, 73 in 2026. The person owns 4% of the company directly and a spouse owns 3%. The company 401(k) held $1,200,000 on December 31, 2025 and, we assume, $1,250,000 on December 31, 2026.

The IRS topic page describes the choice: “You can make your first withdrawal by December 31 of the year you turn 73 instead of waiting until April 1 of the following year,” which keeps the amounts in separate tax years. The $1,250,000 balance is an assumption. How the bigger year touches brackets, Medicare premiums and the net investment income tax is on our Roth conversion and bracket page.

If this person believed the “still working” rule applied and took nothing by the required beginning date, 25 percent of the missed $45,283.02 is $11,320.75 (our arithmetic on the unrounded quotient). If the shortfall is paid and a return showing the tax is filed inside the correction window, the rate is 10 percent, or $4,528.30. The window ends on the earliest of a mailed notice of deficiency, assessment of the tax, or the last day of the second taxable year that begins after the year the tax is imposed (4974(e)(2)). Section 4974(d) lets the IRS waive the tax if the shortfall was due to “reasonable error” and reasonable steps are being taken to fix it, which is requested on Form 5329. The form-level steps are on our Form 5329 and 1099-R page, and the illiquid-IRA version of the penalty is on the required minimum distribution page for illiquid IRAs.

Case 3: retiring at 75

Our assumptions: born 1953, owns under 5%, plan allows the delay, retires in November 2028 at 75. The 401(k) held $1,000,000 on December 31, 2027 and, we assume, $1,060,000 on December 31, 2028.

The regulation makes the retirement year the first distribution calendar year: “the employee’s first distribution calendar year is the calendar year in which the employee retires” (1.401(a)(9)-5(a)(2)(ii)). The RMD for 2028 is based on the December 31, 2027 balance, but it may be paid by April 1, 2029.

Our arithmetic with the Uniform Lifetime divisors for 75 (24.6) and 76 (23.7) in 26 CFR 1.401(a)(9)-9(c). Publication 575 puts it this way: “If no distribution is made in your starting year, the RMDs for 2 years must be made the following year (one by April 1 and one by December 31).”

While you work, the IRS FAQ says an employer “must continue contributions for an employee, even if they are receiving RMDs,” and give the option to keep making salary deferrals in a plan that permits them. Section 401(a)(9)(C)(iii) also provides an actuarial increase of the accrued benefit for an employee who delays under the retirement leg; it reads as aimed at plans that promise a benefit, and this page does not work it (our reading).

Case 4: a plan with Roth money

Our assumptions: a 5 percent owner, 73 in 2026, in a plan that held $700,000 of pre-tax money and $300,000 in a designated Roth account on December 31, 2025.

Pub. L. 117-328 section 325 added 402A(d)(5): “the following provisions shall not apply to any designated Roth account: (A) Section 401(a)(9)(A).” It applies “to taxable years beginning after December 31, 2023” and “shall not apply to distributions which are required with respect to years beginning before January 1, 2024, but are permitted to be paid on or after such date.” The regulation excludes the Roth part from the account balance up to the year of death.

A Roth 401(k) is therefore the one account where being a 5 percent owner no longer matters for lifetime RMDs. It still matters after death: the IRS FAQ says beneficiaries of designated Roth accounts are subject to the RMD rules, which our inherited 401(k) page walks through. Moving pre-tax money to a Roth account inside the plan is a taxable conversion, and its cost is the subject of the bracket page above, not this one.

What a reader can do with this

• List every account with its type and the employer that sponsors it, and mark each as plan, IRA or designated Roth.
• Write down the ownership percentage of the sponsoring employer, including shares held by a spouse, children, grandchildren, parents and any company you own at 5% or more.
• Ask the plan administrator in writing whether the plan lets working participants delay RMDs, and what the plan’s required beginning date is for a 5 percent owner.
• Get the December 31, 2025 balance for each account and divide it by the divisor for the age you reach in 2026.
• Decide with a CPA whether to pay a first RMD in the year of the age or wait for April 1 and take two in one year.
• Check the old plans. A 401(k) at a former employer pays its own RMD, even if you keep working elsewhere.

What to ask your adviser or CPA

1. Do I own more than 5% of the employer, counting my family and any company I hold?
2. Does my current plan document allow the retirement delay, or does it set a uniform date?
3. Which of my accounts owe an RMD for 2026, and from which account is each paid?
4. Should I take the first RMD this year or in the next, and what does two in one year do to my tax?
5. Would moving an old plan or IRA into my current plan work, given that this year’s RMD must come out first?

This is analysis of public documents, not investment, legal or tax advice. The people who can say whether you are a 5 percent owner and what the plan document says are the plan administrator and a CPA or tax attorney with your account statements.

FAQ

Sources, read and saved on October 30, 2026: 26 U.S.C. 401, 402A, 408, 416, 318 and 4974 and 26 CFR 1.401(a)(9)-2, -5 and -9 (Legal Information Institute, Cornell Law School; the regulations as amended by T.D. 10001, 89 FR 58907, July 19, 2024); Pub. L. 117-328, division T, sections 302 and 325 (congress.gov); IRS Publication 575 (2025), Publication 590-B (2025), “Retirement plan and IRA required minimum distributions FAQs” (page last reviewed January 29, 2026) and “Retirement topics - Required minimum distributions (RMDs).” Dollar amounts, shares and the cases are our arithmetic on assumed balances; the divisors are those in 26 CFR 1.401(a)(9)-9(c) and Table III of Publication 590-B. Plan documents, the status of 403(b) and 457(b) plans under the retirement delay and the treatment of later ownership changes were not verified.