The required minimum distribution rules for an inherited IRA turn on two facts: when the original owner died, and your relationship to them. If the owner died in 2020 or later, most non-spouse beneficiaries have to empty the account within ten years, and many also owe annual withdrawals during those ten years. Surviving spouses and a small group of other beneficiaries can still stretch distributions over their own life expectancy. Missing a required withdrawal triggers a 25% excise tax on the amount you should have taken.
The Two Facts That Decide Your Rules
The date of the original owner’s death is the single most important variable. If the owner died before January 1, 2020, the older rules generally still apply, and many beneficiaries can continue using the life-expectancy method. If the owner died on or after that date, the SECURE Act’s ten-year rule governs unless you fall into one of the narrow exception categories.1Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
Before 2020, most IRA beneficiaries could spread withdrawals over their own life expectancy, sometimes across decades. The SECURE Act of 2019 eliminated that option for the majority of non-spouse beneficiaries, replacing it with a ten-year liquidation window.2Internal Revenue Service. Retirement Topics – Beneficiary
Your relationship to the deceased then decides which set of rules within the post-2020 regime applies to you.
Who Can Still Stretch Distributions
The SECURE Act created a protected category called eligible designated beneficiaries (EDBs), who are exempt from the ten-year rule and can still take distributions over their own life expectancy. Five groups qualify:3Office of the Law Revision Counsel. 26 USC 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans
- Surviving spouses, who have additional options of their own.
- Minor biological or adopted children of the owner, but only until they reach age 21. Once they hit 21, the remaining balance must be distributed within the following ten years.
- Disabled individuals meeting the standard under IRC Section 72(m)(7).
- Chronically ill individuals meeting the criteria under IRC Section 7702B(c)(2).
- Any individual not more than 10 years younger than the owner, which often covers siblings or close-in-age friends.
EDB status is determined as of the owner’s date of death. If an EDB dies before receiving the entire inherited balance, the next beneficiary in line does not inherit EDB status and must empty the remaining balance within ten years.
Surviving Spouse Options
A surviving spouse has more choices than any other beneficiary, and they produce meaningfully different results depending on your age and cash needs.
Roll It Into Your Own IRA
The most common approach is to roll the inherited assets into your own IRA or retitle the account in your name. The account is then treated as if it had always been yours. You won’t owe RMDs until you reach your own required beginning date, which is April 1 of the year after you turn 73 (or 75 if you were born in 1960 or later). Calculations then use the Uniform Lifetime Table, which produces smaller annual withdrawals than the Single Life Table.2Internal Revenue Service. Retirement Topics – Beneficiary
The trade-off: if you’re under 59½ and need the money, any withdrawal from an IRA you’ve claimed as your own is subject to the 10% early distribution penalty.
Keep It as an Inherited IRA
SECURE 2.0 Section 327, effective in 2024, lets a surviving spouse who keeps the account titled as an inherited IRA be treated as the deceased owner for RMD purposes. That means no 10% early distribution penalty on withdrawals at any age, the ability to delay RMDs until the deceased spouse would have reached their required beginning date, and use of the Uniform Lifetime Table for those RMDs based on the surviving spouse’s own age.4Internal Revenue Service. Internal Revenue Bulletin 2024-33
When the original owner died before reaching their required beginning date, these benefits apply automatically. When the original owner died after their required beginning date, the surviving spouse must affirmatively elect this treatment, and the IRA custodian or plan must permit it. The spouse can still roll the account into their own IRA later.
The Ten-Year Rule for Non-Spouse Beneficiaries
If you’re a non-spouse beneficiary who isn’t an EDB and the owner died in 2020 or later, you must empty the entire account by December 31 of the year containing the tenth anniversary of the owner’s death. How you get there depends on whether the owner had already started their own RMDs.
If the Owner Died Before Their Required Beginning Date
You have full flexibility on timing. No annual 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 fully emptied by the end of year ten.2Internal Revenue Service. Retirement Topics – Beneficiary
If the Owner Died On or After Their Required Beginning Date
This is the trap. When the owner had already reached their required beginning date, the IRS requires annual distributions in years one through nine, with any remaining balance due by the end of year ten. The final regulations, effective for the 2025 distribution year, confirmed this interpretation after several years of uncertainty.5Internal Revenue Service. Notice 2024-35 – Certain Required Minimum Distributions for 2024
Each annual RMD is calculated using the IRS Single Life Expectancy Table. Look up the life expectancy factor for your age in the year after the owner’s death, then reduce that factor by one for each subsequent year.6Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements
The Missed-RMD Grace Period Has Ended
Because the IRS took years to finalize the annual RMD rules, it waived the excise tax for missed annual withdrawals in 2021, 2022, 2023, and 2024. That grace period is over. Starting with the 2025 distribution year, the annual RMD requirement is fully enforced. If you inherited an IRA from someone who died in 2020 or 2021 and haven’t been taking annual withdrawals, review your obligations now rather than waiting for year ten.
Inherited Roth IRAs
Inherited Roth IRAs follow the same distribution timeline as inherited traditional IRAs. You’re still subject to the ten-year rule or, if you qualify as an EDB, the life-expectancy method. What differs is the annual RMD question and the tax on the money.
Because Roth owners are never required to take distributions during their lifetime, they’re always treated as having died before their required beginning date. No annual RMDs are required during the ten-year period. You simply need to empty the account by the end of year ten.
Contributions come out tax-free. Earnings are also tax-free as long as the original Roth account was open for at least five years before the withdrawal. If the Roth was less than five years old at the time of the owner’s death, the earnings portion of any distribution may be subject to income tax.2Internal Revenue Service. Retirement Topics – Beneficiary
When the Beneficiary Is a Trust, Estate, or Charity
The SECURE Act’s ten-year rule does not apply when an IRA passes to an entity rather than an individual. The older pre-2020 rules govern instead. If the owner died before their required beginning date, the entire account must be distributed within five years. If the owner died on or after their required beginning date, distributions are based on the owner’s remaining life expectancy at the time of death, declining by one each year.
A trust can qualify as a “see-through” trust if it meets specific IRS requirements, allowing distributions based on the life expectancy of the trust’s beneficiaries. Conduit trusts pass all IRA withdrawals through to the beneficiaries immediately; accumulation trusts give the trustee discretion to hold or distribute. Trusts that don’t meet the look-through requirements fall back to the five-year rule or the owner’s remaining life expectancy.
Calculating Your RMD
The formula is straightforward: divide the account balance by a life expectancy factor. Every calculation starts with the fair market value of the inherited IRA as of December 31 of the preceding year. For your 2026 RMD, you use the balance as of December 31, 2025.7Internal Revenue Service. Retirement Topics – Required Minimum Distributions
Which life expectancy table you use depends on your situation:6Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements
- The Single Life Expectancy Table (Table I) applies to non-spouse EDBs stretching distributions and to non-spouse beneficiaries taking annual RMDs during the ten-year period. You find your factor for the first distribution year, then subtract one from that factor each year after.
- The Uniform Lifetime Table (Table III) applies to surviving spouses who have rolled the inherited IRA into their own account or who have elected treatment under SECURE 2.0 Section 327. This table recalculates each year based on the spouse’s current age.
One common mistake: non-spouse EDBs sometimes think they recalculate their life expectancy factor annually using their current age. They don’t. You look up the factor once and reduce it by one each following year.8Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries
Deadlines That Catch People Out
The Year-of-Death RMD
If the original owner died during a year in which they had an RMD obligation and hadn’t yet taken the full amount, you as beneficiary must complete that withdrawal. The deadline is December 31 of the year the owner died, which can leave very little time if death occurred late in the year.7Internal Revenue Service. Retirement Topics – Required Minimum Distributions
First Beneficiary RMD
For beneficiaries who must take annual distributions, whether under the life-expectancy method or the ten-year rule with annual RMDs, the first withdrawal is due by December 31 of the year after the owner’s death. There is no first-year extension to April 1 for inherited IRAs. A surviving spouse who keeps the account as an inherited IRA can delay distributions until the year the deceased spouse would have reached their required beginning date.
The Ten-Year Deadline
For all beneficiaries subject to the ten-year rule, the final deadline is December 31 of the year containing the tenth anniversary of the owner’s death. Miss this deadline and you’ll owe the excise tax on whatever balance remains.
Penalty for a Missed RMD
The excise tax for failing to take a required distribution, or taking less than required, is 25% of the shortfall. If your RMD was $10,000 and you withdrew nothing, you’d owe $2,500 on top of the income tax due when you eventually take the distribution.9Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
The penalty drops to 10% if you correct the shortfall during the correction window, which runs from the date the tax is imposed through the earlier of three events: the IRS mailing a notice of deficiency, the IRS assessing the tax, or the last day of the second tax year after the year the penalty was triggered.
You report missed RMDs and calculate the excise tax on IRS Form 5329, filed with your annual return. If the shortfall was caused by a reasonable error, you can request a waiver. Take the missed distribution as soon as possible, enter “RC” and the shortfall amount on the dotted line next to line 54 of Form 5329, and attach a written explanation.10Internal Revenue Service. Instructions for Form 5329 The IRS reviews the explanation and will notify you if the waiver is denied; in practice, genuine oversights are routinely forgiven when the distribution is promptly corrected.
Distributions from an inherited traditional IRA are taxed as ordinary income in the year you receive them. There’s no capital gains rate and no exclusion. A single large withdrawal can push you into a higher bracket, which is one reason spreading distributions across the ten-year window often makes sense even when annual withdrawals aren’t required.