What RMD Tax Traps Should You Watch for After Age 73?
Last reviewed: September 2026
RMD tax traps rarely show up as one clean number on your tax return. A required minimum distribution can quietly raise your Medicare premium, make part of your Social Security taxable, push you into a higher bracket, cost you your charitable deduction, and in Maryland, edge you closer to a state estate tax bill, all from a withdrawal the IRS required you to take in the first place. Knowing which traps apply to you before your first RMD, not after, is what protects the retirement income you spent decades building.
Key Takeaways
- A married couple's Part B premium can jump from $202.90 to as much as $689.90 a month once income crosses the 2026 IRMAA thresholds.
- Up to 85% of Social Security becomes taxable once combined income passes the $32,000 joint threshold, and a large RMD is usually what pushes retirees over it.
- A qualified charitable distribution lets you give up to $111,000 from an IRA in 2026 without adding a dollar to taxable income, even if you take the standard deduction.
- Maryland taxes traditional IRA and 401(k) withdrawals and layers on a $5 million estate tax exemption that a growing RMD-funded account can approach faster than most families expect.
About the Author: Jeff Judge, CFP®, AEP®, ChFC®, CLU® is Managing Partner of Chesapeake Financial Planners in Forest Hill, Maryland. He has been helping families and business owners in Harford County and the Baltimore metro area navigate required minimum distributions since earning his CFP® certification in 2013, by using Chesapeake's signature process, the R.U.D.D.E.R. Method™. "The RMD itself is never the surprise. The surprise is everything it drags along with it: Medicare, Social Security, and sometimes a state tax bill nobody planned for."
How Do RMD Tax Traps Start With the Medicare IRMAA Surcharge?
The first RMD tax trap most retirees run into has nothing to do with the IRS directly. It shows up in a Medicare premium notice. Part B and Part D premiums carry an Income Related Monthly Adjustment Amount, called IRMAA, for higher earners, and IRMAA is based on modified adjusted gross income from two years earlier. A big RMD in 2026 raises the Medicare premium paid in 2028, which is exactly the kind of delayed consequence that catches people off guard.
For 2026, the surcharge begins once a married couple's income crosses $218,000. At the top tier, the Part B premium reaches $689.90 per person per month, compared with the standard $202.90.
| 2026 joint MAGI | Monthly Part B premium (per person) |
|---|---|
| $218,000 or less | $202.90 |
| $218,001 to $274,000 | $284.10 |
| $274,001 to $342,000 | $405.80 |
| $342,001 to $410,000 | $527.50 |
| $410,001 to $749,999 | $649.20 |
| $750,000 or more | $689.90 |
Does a big RMD affect my Medicare premium right away? No, and that delay is what makes this trap easy to miss. A 2026 RMD affects the premium paid in 2028, based on the tax return filed for 2026, so the bill arrives two years after the withdrawal that caused it. Planning around it means looking at income two years ahead, not just at this year's tax bill.
A $1 million tax-deferred account generates an RMD of roughly $37,736 at age 73, using the divisor from the IRS Uniform Lifetime Table. If that pushes a couple just over an IRMAA threshold, the added Medicare cost alone can run $2,000 to $5,000 a year, money that never appears as its own line on the tax return. Our complete guide to RMD rules and strategies walks through how the distribution amount is calculated, and our IRMAA breakdown covers the surcharge brackets in more depth.
How Do RMDs Make Your Social Security Benefits Taxable?
The second trap sits inside the Social Security check itself. Up to 85% of Social Security benefits can become taxable, depending on combined income, which is adjusted gross income plus tax-exempt interest plus half of the benefit. The thresholds have not moved in decades: $32,000 for joint filers, $25,000 for single filers.
Consider a couple with $40,000 in Social Security and $30,000 in pension income. Without an RMD, they might owe very little federal tax on the Social Security portion. Add a $50,000 RMD, and roughly $34,000 of their Social Security, 85% of the $40,000 benefit, becomes taxable, and their total bill rises sharply from that single change.
The math gets worse in the phase-in range, where every extra dollar of income can make up to 85 cents of Social Security taxable at the same time. See our post on whether your Social Security benefit is taxable for the full calculation.
Why Do RMDs Push You Into a Higher Bracket and Trigger the Net Investment Income Tax?
RMDs do not just add to taxable income. They can carry a return across a bracket line, where every additional dollar is taxed at a higher rate. For 2026, married couples filing jointly move from the 12% bracket into the 22% bracket at $100,800 of taxable income, and into the 24% bracket at $211,400. Many retirees assume they will land in a lower bracket than during their working years. Combine an RMD with Social Security, a pension, and maybe part-time income, and that assumption often does not hold up.
Does the net investment income tax apply to my RMD itself? No, an RMD is not counted as net investment income. But once modified adjusted gross income crosses $250,000 for joint filers or $200,000 for single filers, the 3.8% NIIT applies to interest, dividends, and capital gains, and an RMD is exactly the kind of income that can push a return over that line.
I see this pattern often with clients in their early 70s who built diversified taxable accounts on top of their retirement savings. The RMD itself is usually a modest bump in ordinary income, but it is the bump that flips the NIIT switch on investment income they were not thinking about at all.
How Can a Qualified Charitable Distribution Solve the RMD Standard Deduction Trap?
Many retirees give to charity and assume the gift lowers their tax bill. For 2026, the standard deduction is $32,200 for married couples filing jointly, which is high enough that most households no longer itemize. If the standard deduction is taken, charitable gifts provide no additional tax benefit, while the RMD still raises taxable income exactly as before.
A qualified charitable distribution solves this mismatch. Retirees age 70½ and older can transfer up to $111,000 in 2026 directly from an IRA to a qualified charity. The distribution counts toward the RMD requirement but never shows up in taxable income, which makes the gift effectively deductible even for someone who takes the standard deduction. The one catch: the transfer has to go straight from the custodian to the charity. Money that lands in a personal account first and gets written as a check afterward does not qualify. Read more in our guide to qualified charitable distributions.
How Does Maryland's RMD Tax Treatment Compare, and What Happens to a Surviving Spouse's RMD?
State tax treatment of RMDs varies widely, and Maryland adds a layer most national coverage of this topic skips entirely. Some states exempt retirement distributions outright. Others tax them at full ordinary income rates. Maryland falls into the second camp: traditional IRA and 401(k) withdrawals, including RMDs, are taxed as ordinary income on the state return, offset only by the Maryland pension exclusion, which caps out at $40,600 for 2026 and phases down as Social Security income rises.
Compare that with California, whose top rate is 12.3% plus a 1% surcharge above $1 million, or New York at 10.9%. A retiree who delays a move to a no-income-tax state such as Florida can pay years of state tax on RMDs that a relocation would have avoided. Maryland retirees who stay put should factor the pension exclusion phase-down directly into RMD planning, not treat it as a footnote.
Maryland is also one of the few states with both an estate tax and an inheritance tax. The Maryland estate tax exemption sits at $5 million per person, far below the federal exemption. A large tax-deferred account that has been compounding for decades, combined with a paid-off home and life insurance, can bring a Harford County or Bel Air family closer to that state threshold than they realize, and every year of RMDs that go unspent and get reinvested adds to that total.
Jeff Judge, CFP®, has walked more than one Bel Air and Forest Hill client through this exact surprise: an estate they assumed was safely under the radar for Maryland estate tax purposes, only to find that a decade of reinvested RMDs, stacked on top of a paid-off house, put them within striking distance of that $5 million threshold. "That conversation always goes better in someone's 60s than it does after the fact," he says.
RMDs also create what planners call the widow's penalty. Joint filers benefit from wider tax brackets and a larger standard deduction than single filers. After the year a spouse dies, the survivor must file as single, with narrower brackets. Yet the RMD continues at nearly the same dollar level, based on the account balance and the survivor's own age, not filing status. That combination often pushes a surviving spouse into a meaningfully higher bracket right when they can least afford the surprise. Our widowhood financial checklist covers the broader set of decisions that follow.
A handful of moves can blunt most of these traps if they happen early enough:
- Roth conversions in the years before RMDs begin. Converting traditional IRA funds to a Roth IRA in your 60s and early 70s lets you control the timing and size of taxable income, and Roth IRAs carry no RMDs during the original owner's lifetime.
- Strategic timing of other income. Delaying Social Security or spreading capital gains across multiple years can open lower-income years that are ideal for Roth conversions before RMDs start.
- Qualified charitable distributions. For charitably inclined retirees, QCDs satisfy the RMD requirement while keeping the distribution out of taxable income entirely.
- Asset location planning. Keeping tax-efficient holdings such as index funds in taxable accounts, and higher-income holdings in tax-advantaged accounts where possible, reduces the pressure an RMD adds each year.
By the time the first RMD arrives, several of the most useful strategies are already off the table. Working through these scenarios with a financial planner in your 60s, using a framework such as the R.U.D.D.E.R. Method™, gives you the runway to act while you still have options.
Frequently Asked Questions
At what age do RMDs start in 2026?
Required minimum distributions currently begin at age 73 for most retirees, under the SECURE 2.0 Act's phased schedule. The exact starting age depends on your birth year, so check the IRS RMD tables or work with a planner to confirm your specific start date before assuming the standard age applies to your situation.
Can converting to a Roth IRA get rid of RMD tax traps entirely?
A Roth conversion does not remove the tax due at conversion, but it does remove future RMDs from that converted amount, since Roth IRAs have no lifetime RMD requirement for the original owner. Converting in lower-income years before RMDs begin is one of the most effective ways to shrink the size of future RMD-triggered traps.
Does a qualified charitable distribution count toward my RMD?
Yes. A QCD made directly from an IRA custodian to a qualified charity counts dollar for dollar toward the RMD requirement for that year, up to the annual QCD limit, while keeping the distributed amount out of taxable income entirely, which is a real advantage over writing a check yourself.
How much could the IRMAA surcharge actually cost me?
At the top 2026 tier, the Part B premium reaches $689.90 per person per month versus a standard $202.90, a difference of roughly $5,844 per person per year. Combined with the Part D surcharge, a couple who crosses the highest threshold can face several thousand dollars in added Medicare costs annually.
Does Maryland tax my RMD?
Yes. Maryland taxes traditional IRA and 401(k) withdrawals, including RMDs, as ordinary income, reduced only by the Maryland pension exclusion, which is $40,600 for 2026 and phases down against Social Security income. Roth IRA distributions are not taxed by Maryland, which is one reason Roth conversions carry extra weight for Maryland retirees specifically.
What is the widow's penalty on RMDs?
The widow's penalty describes the jump in effective tax rate a surviving spouse faces when required minimum distributions continue at nearly the same dollar amount while the survivor's tax brackets and standard deduction shrink from married filing jointly to single. Planning ahead, often with Roth conversions, can soften the impact before it happens.
Should you talk to a planner before your first RMD, or wait until the year it happens? Talk to one first. Every strategy in this post, Roth conversions, QCDs, asset location, the timing of other income, works best when it has years to compound, not months. Once the first RMD lands, several of the best levers are already gone.
If any of these RMD tax traps sound like they could apply to your accounts, the fix almost always works better in your 60s than in the year the first distribution actually arrives. Schedule a conversation with Chesapeake Financial Planners to walk through your specific accounts, your Maryland tax exposure, and a plan built around the R.U.D.D.E.R. Method™.
A version of this article originally appeared in Kiplinger.
Disclosures
The information provided is for educational purposes only and should not be construed as investment advice. Investment strategies should be tailored to individual circumstances, risk tolerance, and goals. Past performance doesn't guarantee future results. Consult with qualified financial professionals regarding your specific situation.
Advisors associated with Chesapeake Financial Planners may be either (1) LPL Financial Registered Representatives offering securities through LPL Financial, Member FINRA and SIPC, and investment advisor representatives offering investment advice through Great Valley Advisor Group; or (2) solely investment advisor representatives offering investment advice through Great Valley Advisor Group and not affiliated with LPL Financial. Great Valley Advisor Group, and Chesapeake Financial Planners are separate entities from LPL Financial.
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