Money you take out of a Roth IRA you inherited is generally free of income tax, but how long you can leave it there depends on your relationship to the person who died. The distribution rules for an inherited Roth IRA sort beneficiaries into three groups: spouses, who have the most flexibility; other individuals named on the account, who usually have ten years to empty it; and entities like estates or most trusts, which usually have five. A Roth-specific quirk runs through all of it: because Roth owners never had to take lifetime required minimum distributions, they are always treated as having died before their required beginning date, which removes the annual-withdrawal requirement that trips up inherited traditional IRA beneficiaries.
Which Beneficiary Group You Fall Into
Your category decides your deadline, so figure this out before anything else. The IRS finalizes the beneficiary roster on September 30 of the year after the owner’s death, and the rules that apply are locked in at that point.1Internal Revenue Service. Retirement Topics – Beneficiary
- Eligible designated beneficiaries (EDBs). A surviving spouse, the account owner’s minor child (under 21), a disabled or chronically ill person, or someone no more than ten years younger than the deceased owner. EDBs can stretch distributions over their own life expectancy.
- Designated beneficiaries. Any other individual named on the account. Adult children, siblings, friends, and most other people land here. They follow the 10-year rule.
- Non-designated beneficiaries. Estates, charities, and most trusts. Generally, the account must be emptied within five years of the owner’s death.
Whatever your category, if you are not a spouse you cannot roll the money into your own Roth IRA. The assets must move into a properly titled inherited (or beneficiary) IRA. Retitling the account incorrectly can cause the IRS to treat the whole balance as distributed in one year, which defeats the entire point of the timeline you were entitled to.
If You Are the Surviving Spouse
A spouse has three practical choices, and the right one usually depends on your age and whether you need the money soon.
Treat It as Your Own
The spousal rollover is often the strongest long-term move. You retitle the account in your own name and it becomes your personal Roth IRA. No lifetime required minimum distributions, new contributions allowed subject to normal income limits, and you name your own beneficiaries. The account keeps growing tax-free for as long as you want.2Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
One catch: if you are under 59½ and pull out earnings, the normal 10% early withdrawal penalty can apply the same way it would with any Roth IRA you opened yourself. Contributions and amounts that qualify as tax-free distributions are not subject to that penalty.
Keep It as an Inherited IRA
If you are under 59½ and expect to need the money, leaving the account titled as an inherited Roth IRA sidesteps the 10% early withdrawal penalty on any distribution. You can withdraw whenever and whatever you want. You still have to empty the account eventually, either using the life expectancy method or the 10-year rule.
Disclaim the Inheritance
You can also refuse the inherited Roth IRA through a qualified disclaimer. The disclaimer has to be in writing, delivered to the IRA custodian within nine months of the owner’s death, and you must not have accepted any benefit from the account before disclaiming. The assets then pass to the contingent beneficiary named on the account as if you had never been named.3Office of the Law Revision Counsel. 26 USC 2518 – Disclaimers
This can make sense when a spouse already has plenty of retirement assets. Passing the account to an adult child gives that child a fresh ten-year window of tax-free growth.
The 10-Year Rule for Most Non-Spouse Beneficiaries
If you inherited a Roth IRA after 2019 and you are not an eligible designated beneficiary, the entire balance must be out by December 31 of the year containing the tenth anniversary of the owner’s death. Inherit in 2025, empty the account by the end of 2035.1Internal Revenue Service. Retirement Topics – Beneficiary
Here is where inherited Roth IRAs get a real advantage over inherited traditional IRAs. The final regulations require annual distributions during the 10-year window only when the original owner died on or after their required beginning date. Roth owners never have a required beginning date, so they are always treated as dying before it. That means no annual withdrawals during years one through nine. Leave the whole balance untouched, let it compound tax-free, and take one distribution in year ten if that suits you.2Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
Plenty of beneficiaries still choose to spread withdrawals across the decade for cash-flow reasons. Since qualified distributions are tax-free either way, there is no tax cost to waiting.
Eligible Designated Beneficiaries and the Life Expectancy Stretch
EDBs are the only non-spouse individuals who can still stretch distributions across their own life expectancy. The qualifying categories are narrow:
- Minor child of the account owner. Biological or legally adopted only. Stepchildren and grandchildren do not qualify. EDB status ends at 21, and a 10-year clock starts then for the remaining balance.
- Disabled individual. The IRS applies a strict test: unable to perform any substantial gainful activity due to a physical or mental condition expected to result in death or to last indefinitely.4Office of the Law Revision Counsel. 26 USC 72 – Annuities, Certain Proceeds of Endowment and Life Insurance Contracts
- Chronically ill individual. Defined under IRC Section 7702B, generally meaning someone unable to perform at least two activities of daily living for at least 90 days, or someone needing substantial supervision due to cognitive impairment.
- Person not more than 10 years younger than the deceased owner. A sibling close in age is the classic example.
An EDB using the life expectancy method must start taking annual distributions by December 31 of the year following the owner’s death, with each year’s amount calculated from the IRS Single Life Expectancy Table.1Internal Revenue Service. Retirement Topics – Beneficiary Annual amounts are small relative to the balance, so the bulk of the account keeps compounding.
The minor child rule is worth flagging because EDB status is temporary. A child who inherits at birth could hold the account for years under the stretch and still get a fresh 10-year window running from age 21 to age 31. For disabled and chronically ill beneficiaries, EDB status lasts for life, which is the most powerful stretch available.
When a Trust Inherits
Naming a trust as the Roth IRA beneficiary is common when the goal is to control how a minor, a spendthrift, or a person with special needs uses the money. The distribution timeline turns on whether the trust qualifies as a “see-through” trust, which lets the IRS look through the trust to the individual beneficiaries and apply the rules accordingly.
A trust qualifies as see-through if it is valid under state law, irrevocable (or becomes irrevocable at the owner’s death), has individual beneficiaries identifiable from the trust document, and provides the required documentation to the IRA custodian.5Internal Revenue Service. Internal Revenue Bulletin 2024-33 A trust that fails these tests is treated as a non-designated beneficiary, and the account must generally be emptied within five years of the owner’s death.1Internal Revenue Service. Retirement Topics – Beneficiary
Even a qualifying see-through trust runs into the 10-year rule for most beneficiaries under the SECURE Act. If the trust beneficiary is disabled or chronically ill, the life expectancy stretch is still available. For everyone else, the trust must be emptied within ten years.
Successor Beneficiaries
When an EDB dies before fully distributing the inherited Roth IRA, the person who inherits next follows the 10-year rule. The clock starts from the EDB’s death, not the original owner’s. The successor must empty the account by December 31 of the year containing the tenth anniversary of the EDB’s death.1Internal Revenue Service. Retirement Topics – Beneficiary
When a regular (non-EDB) designated beneficiary dies partway through their own 10-year window, the successor does not get a fresh ten years. They inherit the original deadline. People sometimes assume a second death resets the clock; it does not, and the mistake is expensive.
The 5-Year Holding Period for Tax-Free Withdrawals
Qualified distributions from an inherited Roth IRA are free of both income tax and penalties, but that treatment depends on the original owner’s Roth IRA having satisfied the 5-year holding period. The clock started on January 1 of the tax year the owner first contributed to any Roth IRA. If the owner opened their first Roth IRA in 2019, the five-year period was met on January 1, 2024. Inheriting the account does not restart the clock.6Internal Revenue Service. Publication 590-B (2025) – Distributions From Individual Retirement Arrangements (IRAs)
Once that holding period is met, every dollar you withdraw is tax-free, whether it traces to contributions, conversions, or earnings. Most inherited Roth IRAs clear this bar easily because the accounts have been open for years.
If the holding period has not been met, only the earnings portion is taxable. Roth distributions follow a set ordering rule: contributions come out first (always tax-free and penalty-free), then conversion amounts, then earnings.7Office of the Law Revision Counsel. 26 USC 408A – Roth IRAs Because of that order, a beneficiary can often pull out a substantial amount before hitting anything taxable. The 10% early withdrawal penalty is waived for distributions attributable to the owner’s death.
How to Report a Taxable Distribution
If the 5-year rule was not met and some of your withdrawal is taxable, report it on IRS Form 8606, Part III. The form subtracts basis (contributions and conversion amounts) from the total withdrawal to isolate the taxable portion. The full distribution goes on line 4a of Form 1040; the taxable portion goes on line 4b.8Internal Revenue Service. 2025 Instructions for Form 8606 – Nondeductible IRAs
The custodian issues a Form 1099-R for each distribution year and uses distribution code 4 for death distributions. When the account qualifies as tax-free, the taxable amount on the 1099-R should be zero, but check it. Custodians sometimes report the full amount and leave the tax-free calculation to you.9Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025)
Two Different “5-Year Rules”
The phrase “5-year rule” shows up in two unrelated contexts, and confusing them causes real problems. The holding period rule above governs whether earnings come out tax-free. A separate 5-year distribution rule applies only to non-designated beneficiaries (estates, charities, non-qualifying trusts) and requires the account to be emptied by the end of the fifth year following the owner’s death.10Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries If you are an individual beneficiary on the 10-year rule, only the holding period version applies to you.
What Happens If You Miss a Deadline
Miss a required distribution and the excise tax is 25% of what you should have withdrawn but did not. In the final year of the 10-year window, if nothing has come out, that penalty hits the full remaining balance. SECURE 2.0 reduced the penalty from 50% for tax years beginning after 2022.2Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs Catch the mistake and take the missed amount within two years, and the penalty drops to 10%.
Because inherited Roth IRAs demand nothing during years one through nine, the common failure mode is simply losing track of the year-ten deadline. Put a calendar reminder in year nine. It is not exciting, but it protects a quarter of the account.