MW Can I put my RMD into my Roth IRA?

By Dan Moisand

It's Required Minimum Distribution season. What you can - and can't do with them.

Dear Dan,

I am taking my first Required Minimum Distribution next year. After taxes are taken, can I deposit the funds into my Roth account? If not, what other options are there?

- Ruminating on RMDs

Dear Ruminating,

You cannot put the RMD in a Roth IRA or any other type of retirement account like another IRA, a 401(k), or 403(b). The funds sent to you can go in any type of "nonqualified" or "taxable" account. Nonqualified accounts include common bank accounts, brokerage accounts, and some tax deferred accounts for which you get no tax deduction upon contributions like certain annuity contracts.

Once you take your RMD, you can convert additional amounts to a Roth. For example, say you could add $50,000 of income this year and have it taxed at a low rate and your RMD is $30,000. The RMD must be satisfied before converting any amount to a Roth.

Read: I'm 74. If I went back to work, could I stop taking my RMD?

So, you could distribute $30,000 to yourself, put that in a nonqualified account like your checking and then convert $20,000 to a Roth IRA. You have added $50,000 of income in total.

If you were charitably inclined, you could make Qualified Charitable Distributions (QCD) and fully meet your $50,000 Roth conversion target. How? You donate $30,000 via QCD thus satisfying your RMD. Even though such QCD are entirely excluded from income, they still count toward your RMD. Thus, you still have the full $50,000 of room at the low rate to accommodate a $50,000 Roth conversion. This also lowers future RMD because the IRA balance was reduced by $80,000, $30,000 to charity and $50,000 to the Roth IRA.

The trigger age for making QCD is 70 1/2, not the age when RMD begins. Because you are over 70 1/2, if you wish to reduce your future RMD, you can make QCD up to $108,000 in total from your IRA in 2025.

We have several clients that do not need RMD for their expenses who dramatically reduce their RMD taxes by donating to charity via QCD after age 70 1/2. Some will also convert to Roth accounts if the tax rate is favorable and they do not intend to leave the funds to charity upon their death.

Starting this year (finally!), Form 1099-R, which reports distributions from IRAs will include a tax reporting code for Qualified Charitable Distributions (Code Y within Box 7). This allows custodians to designate whether a distribution was a QCD. In the past, the total amount of distributions were reported on Form 1099-R even if some of the distributions were QCD, resulting in many errors.

It will remain up to the taxpayer to ensure that the recipient is a qualifying organization for QCD treatment and all other requirements are met but this change will reduce the considerable number of errors on tax returns we have seen others prepare for clients.

Read: I botched my first RMD by taking one withdrawal for three accounts. Shouldn't the final amount be the only thing that matters?

If you have a question for Dan, please email him with 'MarketWatch Q&A' on the subject line.

-Dan Moisand

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

October 14, 2025 09:45 ET (13:45 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.