Inherited IRA Distribution Rules for Non-Spouse Beneficiaries

If you inherited an IRA from someone other than your spouse, the inherited IRA distribution rules for non-spouse beneficiaries generally give you ten years to empty the account. The clock starts the year the original owner died and ends on December 31 of the year containing the tenth anniversary of that death. Whether you also have to take annual withdrawals during those ten years depends on one thing: whether the person you inherited from had already started taking their own required minimum distributions. A small group of beneficiaries qualifies to stretch withdrawals over their own life expectancy instead, but the qualifying categories are narrow.

First, Open the Account Correctly

Before any distribution question matters, the money has to land in a properly titled inherited IRA. The account stays in the deceased owner’s name with you listed as the beneficiary. A typical title reads something like “Jane Smith, deceased, for the benefit of John Smith.” That titling preserves the tax-deferred status and keeps the IRS from treating the transfer as a lump-sum taxable distribution.¹

Two mistakes here are expensive and irreversible. First, non-spouse beneficiaries cannot roll inherited funds into their own IRA. That option belongs only to surviving spouses. The only permitted transfer is a direct trustee-to-trustee transfer into the newly established inherited IRA; if the custodian cuts you a check, the entire amount becomes taxable income and cannot be redeposited.¹ Second, do not commingle the inherited money with your own retirement accounts. Mixing them is treated as a full taxable distribution of the inherited amount.

The custodian will ask for a certified death certificate and the beneficiary designation form on file. If you inherited more than one IRA from the same person, you can total the required minimum distributions across those accounts and take the full amount from any one of them. That aggregation only works for IRAs inherited from the same decedent; accounts inherited from different people are tracked and distributed separately.¹

The 10-Year Rule

The default rule requires the entire inherited IRA balance to be withdrawn by December 31 of the year containing the tenth anniversary of the owner’s death.² If the owner died in 2025, the account must be at zero by December 31, 2035.

How much freedom you have inside that window depends on whether the original owner had reached their required beginning date (RBD) before dying. The RBD is currently April 1 of the year after the owner turns 73. Under SECURE 2.0, that age rises to 75 for people who turn 73 after December 31, 2032.³

Owner Died Before Their Required Beginning Date

No withdrawals are required in years one through nine. You can take money out whenever and in whatever amounts you want, as long as the account is empty by the end of year ten.¹ That flexibility is useful for tax planning. Pull more in low-income years, skip withdrawals in high-income years, and end at zero.

Owner Died On or After Their Required Beginning Date

The rules tighten. You must take annual required minimum distributions in years one through nine, calculated using your own single life expectancy, and still empty the account by the end of year ten.⁴ The annual RMD is a floor, not a ceiling; you can always take more.

The annual RMD equals the prior year-end account balance divided by your applicable life expectancy factor from the IRS Single Life Table, with the factor decreasing by one each subsequent year.⁵

The IRS waived penalties for missed annual RMDs in this scenario from 2021 through 2024 while it finalized regulations.⁴ That relief period is over. If you have been skipping annual withdrawals since 2021, talk to a tax professional about how to catch up.

Who Can Still Stretch Distributions

A small group of non-spouse beneficiaries, called eligible designated beneficiaries (EDBs), can bypass the 10-year rule and take distributions over their own life expectancy. Annual RMDs use the beneficiary’s single life expectancy factor from the IRS Single Life Table, which usually produces much smaller required withdrawals than a 10-year drawdown. The qualifying categories are:⁶

A minor child of the deceased owner. Only the owner’s own child qualifies, not a grandchild or other minor relative. EDB status ends when the child reaches the age of majority.
A disabled individual, defined as someone with a medically determinable physical or mental impairment that prevents any substantial gainful activity and is expected to result in death or be long-continued and indefinite.⁷
A chronically ill individual, certified by a licensed health care practitioner as unable to perform at least two activities of daily living for at least 90 days, or as requiring substantial supervision due to severe cognitive impairment.⁸
A person not more than 10 years younger than the deceased. A sibling, friend, or partner close in age to the original owner qualifies without any disability or illness standard.

The Minor Child Transition

A minor child’s EDB status has a built-in expiration. For inherited IRA purposes, the age of majority is 21. Once the child hits 21, the life expectancy method ends, the 10-year rule takes over on the remaining balance, and the account must be fully distributed by December 31 of the year the child turns 31.⁶ There is no extension for children still in school. Plan the drawdown well before the 21st birthday.

If You Inherit From Another Beneficiary

If the person you inherited from was themselves a beneficiary of someone else’s IRA, you are a successor beneficiary, and the rules are less generous than people expect. You do not get a fresh 10-year clock, and you cannot stretch over your own life expectancy even if you are a spouse or would otherwise qualify as an EDB.

If the person you inherited from was a regular designated beneficiary on the 10-year rule, you must finish distributing the account by December 31 of the year containing the tenth anniversary of the original owner’s death. If they were an EDB using life expectancy payments, you must distribute the remaining balance by December 31 of the year containing the tenth anniversary of their death.²

How the Withdrawals Are Taxed

Distributions from a traditional inherited IRA are taxed as ordinary income. Every dollar you withdraw is added to your salary, investment income, and other earnings for that year and taxed at your marginal rate. A concentrated 10-year drawdown can push you into a higher bracket, especially on larger accounts, which is why spreading withdrawals across the window matters. A beneficiary earning $90,000 who pulls $100,000 in one year lands in a very different place than one who takes $50,000 across two years.

Inherited Roth IRAs follow the same distribution timeline (10-year or life expectancy for EDBs), but qualified distributions come out federal-income-tax-free.⁶ One wrinkle: if the original Roth owner had not held any Roth IRA for at least five tax years before death, earnings withdrawn before that five-year mark may be taxable. The original contributions are always tax-free.

One advantage applies across the board: the 10% early withdrawal penalty that normally hits IRA distributions before age 59½ does not apply to inherited IRA distributions.⁹ A 30-year-old beneficiary can take money out without that surcharge.

The custodian reports each distribution on Form 1099-R under your name and Social Security number, with distribution code 4 in Box 7 indicating a death distribution.¹⁰ You report the taxable amount on your own return.

What Happens If You Miss a Deadline

Failing to take a required distribution triggers an excise tax of 25% on the shortfall, meaning the difference between what should have been withdrawn and what actually was.³ The rate drops to 10% if you correct the mistake within two years by withdrawing the missed amount and filing an amended or timely return reflecting the additional tax.¹¹

The penalty applies both to missed annual RMDs and to the year-ten final deadline. Report it on IRS Form 5329, filed with your federal return for the year the distribution was due.³

The IRS can waive the penalty if you show the shortfall resulted from reasonable error and you are taking steps to correct it. Request the waiver by attaching an explanation letter to Form 5329.³ These waivers are granted more often than people expect, particularly when the beneficiary acts quickly after discovering the mistake. Now that the SECURE Act transition relief has ended and the rules are well-publicized, “I didn’t know” is a harder argument. Put the deadlines on the calendar and take the distributions on time.

1
Internal Revenue Service. Publication 590-B, Distributions From Individual Retirement Arrangements
2
Office of the Law Revision Counsel. 26 USC 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans
3
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
4
Internal Revenue Service. Notice 2024-35, Certain Required Minimum Distributions for 2024
5
eCFR. 26 CFR 1.401(a)(9)-9 – Life Expectancy and Uniform Lifetime Tables
6
Internal Revenue Service. Retirement Topics – Beneficiary
7
eCFR. 26 CFR 1.72-17 – Special Rules Applicable to Owner-Employees
8
Office of the Law Revision Counsel. 26 USC 7702B – Treatment of Qualified Long-Term Care Insurance
9
Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
10
Internal Revenue Service. Instructions for Forms 1099-R and 5498
11
Internal Revenue Service. 2025 Instructions for Form 5329