IRS Form 14568-H – IRS Forms, Instructions, Pubs 2026 – In the world of retirement planning, ensuring compliance with IRS rules is crucial for maintaining the tax-advantaged status of your plan. One common issue that plan sponsors face is the failure to pay Required Minimum Distributions (RMDs) on time. This can lead to significant penalties and plan disqualification if not addressed properly. Enter IRS Form 14568-H, the Model VCP Compliance Statement Schedule 8, designed specifically for correcting these RMD failures under the Voluntary Correction Program (VCP). In this comprehensive guide, we’ll explore what Form 14568-H is, when to use it, how to complete it, and tips for a successful submission—all based on the latest IRS guidelines as of 2026.
What Is IRS Form 14568-H?
IRS Form 14568-H is a specialized schedule used in conjunction with Form 14568, the Model VCP Compliance Statement, as part of the Employee Plans Compliance Resolution System (EPCRS). It focuses exclusively on failures to distribute RMDs timely or in the correct amounts under Internal Revenue Code (IRC) Section 401(a)(9). RMDs are mandatory withdrawals that retirement plan participants must take starting at age 73 (as updated in recent legislation), ensuring that deferred tax benefits don’t extend indefinitely.
This form allows plan sponsors to voluntarily disclose and correct RMD errors, potentially avoiding audits and preserving the plan’s qualified status. It’s applicable to both defined contribution plans (like 401(k)s) and defined benefit plans, but it has limitations—such as not covering failures to commence benefits at normal retirement age or upon a participant’s death. In those cases, a narrative attachment to Form 14568 is required instead.
The Purpose of Form 14568-H in the Voluntary Correction Program
The VCP is a component of EPCRS that enables plan sponsors to fix operational or document failures before the IRS discovers them during an audit. For RMD issues, Form 14568-H streamlines the process by providing a standardized template to describe the failure, propose corrections, and request relief from excise taxes under IRC Section 4974.
Key benefits include:
- Waiver or reduction of the 25% excise tax (potentially down to 10% under SECURE 2.0 if corrected timely).
- Avoidance of plan disqualification.
- Structured guidance to ensure corrections align with IRS standards.
Submissions are made via Pay.gov, with user fees ranging from $1,500 to $3,500 based on plan assets. Unlike the Self-Correction Program (SCP), VCP allows for excise tax waiver requests, making it ideal for significant or ongoing RMD failures.
When Should You Use Form 14568-H?
Use this form if your retirement plan has failed to make timely or full RMD payments to participants or beneficiaries. Common scenarios include:
- Missing distributions for participants over age 73.
- Underpaying RMD amounts due to calculation errors.
- Systemic issues affecting multiple participants across years.
However, do not use Form 14568-H if:
- The failure involves beneficiaries only (report on Form 14568 instead).
- Benefits weren’t commenced at normal retirement age or upon death.
- The plan is under IRS audit (consider Audit CAP instead).
For failures affecting both participants and beneficiaries, attach a narrative to Form 14568. If the error is recent and insignificant, SCP might suffice without IRS approval, but VCP is recommended for excise tax relief.
Step-by-Step Guide to Completing IRS Form 14568-H?
Filling out Form 14568-H requires careful attention to detail. Always include the plan name, Employer’s Identification Number (EIN), and plan number on each page. Here’s a breakdown of each section:
Section I: Identification of Failure
Identify the RMD failure, counting affected participants separately for each calendar year. Use a table format to list:
- Calendar years of the failure.
- Number of participants affected per year.
- Total missed RMD amounts (excluding earnings).
Tip: Use a separate line for each year to avoid common errors.
Section II: Description of the Proposed Method of Correction
Outline how you’ll fix the issue.
- For Defined Contribution Plans: Distribute missed RMDs plus earnings from the failure date to distribution. Calculate RMDs by dividing the adjusted account balance by the applicable life expectancy period. Describe your earnings calculation method (e.g., actual investment returns or reasonable estimates).
- For Defined Benefit Plans: Pay missed RMDs plus an additional amount for the loss of use, using the plan’s actuarial equivalence terms. If subject to IRC Section 436(d) restrictions on lump sums, the sponsor must contribute an equivalent amount to the plan. Include the latest Adjusted Funding Target Attainment Percentage (AFTAP) certification if not restricted.
Section III: Request for Relief
Indicate if you’re requesting waiver of the Section 4974 excise tax. If yes, and if any affected participant is an owner-employee or 10% corporate owner, provide a detailed explanation justifying the relief.
Section IV: Change in Administrative Procedures
Explain how the failure occurred and the steps taken to prevent future issues, such as improved tracking systems or staff training.
Section V: Enclosures
List required attachments beyond the Form 8950 checklist:
- Detailed calculations for each affected participant or a representative sample.
- Earnings or interest rate illustrations.
- AFTAP certification for defined benefit plans if applicable.
| Section | Key Requirements | Common Pitfalls |
|---|---|---|
| I: Identification | List years, participants, and missed amounts (no earnings) | Combining years on one line |
| II: Correction Method | Detail distributions and earnings adjustments | Vague earnings descriptions |
| III: Relief Request | Explain for owner-employees | Omitting justification |
| IV: Procedures | Describe causes and fixes | Generic responses |
| V: Enclosures | Include samples and certifications | Missing calculations |
Tips for a Successful VCP Submission Using Form 14568-H
To streamline IRS review:
- Use the most current form version from IRS.gov.
- Provide specific calculations—don’t generalize.
- For defined contribution plans, clearly explain earnings methodology.
- Submit via Pay.gov with Form 8950 and all attachments.
- If the failure spans multiple years, correct within 150 days of IRS approval.
Avoid modifications to the form’s format, as this can lead to rejection. For complex cases, consult a tax professional or ERISA attorney.
Conclusion: Why Correcting RMD Failures Matters
Failing to address RMD errors can result in hefty excise taxes and plan risks, but IRS Form 14568-H offers a straightforward path to compliance through VCP. By voluntarily correcting these issues, plan sponsors protect participants’ benefits and maintain tax advantages. Stay proactive with regular audits and updates to your plan’s procedures to prevent future failures. For the official form and more details, visit the IRS website or consult the latest Revenue Procedure 2021-30 (as modified).