Do Inherited IRAs Have RMDs? Spouse, Ten-Year Rule, Penalties

Yes, inherited IRAs almost always require distributions, but the schedule depends on your relationship to the person who died, the year they died, and whether they had already reached the age when their own withdrawals were supposed to begin. Do inherited IRAs have RMDs for every heir? In practice, yes: even the beneficiaries who escape strict annual withdrawals still have to empty the account within a set number of years. The SECURE Act of 2019 and SECURE 2.0 Act of 2022 rewrote the timelines, and the IRS finalized the current rules in July 2024, with full enforcement starting with 2025 distributions.¹

One threshold controls a lot of what follows: the original owner’s Required Beginning Date (RBD), the age at which they were supposed to start their own withdrawals. Under current law that age is 73 for people born between 1951 and 1959, and 75 for those born in 1960 or later.² Whether the owner died before or after that date changes what you have to do. Note that Roth owners never had a lifetime RBD, but Roth beneficiaries still owe distributions after the owner’s death.

If You Inherited From a Spouse

Surviving spouses have the most flexibility of any beneficiary. You can roll the deceased spouse’s IRA into your own IRA, which makes the account fully yours: distributions wait until you reach your own RBD, and the withdrawal schedule uses your own life expectancy.³ A direct trustee-to-trustee transfer is the simplest route. An indirect rollover works too, but you have 60 days to complete it and are limited to one such rollover in any 12-month period.⁴

The alternative is keeping the account as a separate inherited IRA. That path is often better if you are younger than 59½ and may need the money, because withdrawals from an inherited IRA are not hit with the 10% early withdrawal penalty that applies to your own IRA.³ Under this option, you can delay distributions until the year your deceased spouse would have reached their RBD, then take annual withdrawals based on your own life expectancy.

The Ten-Year Rule for Most Other Heirs

If you are not a spouse and you inherited the IRA after December 31, 2019, the default rule is that the account must be fully emptied by December 31 of the tenth year following the owner’s death.³ This replaced the old “stretch IRA,” which had allowed non-spouse beneficiaries to spread distributions over their lifetime.

Whether you can wait until year ten or must take yearly amounts along the way depends on the RBD threshold:

If the owner died before reaching their RBD, timing is up to you. Take any amount in any year, as long as the balance hits zero by the end of year ten.
If the owner died on or after their RBD, you must take annual distributions in years one through nine based on your life expectancy, then withdraw whatever is left by the end of year ten.¹

The IRS waived penalties for beneficiaries who skipped those annual withdrawals during 2021 through 2024 while the final regulations were being written.⁵ That relief has ended. Beginning with 2025, the annual requirement applies in full, and missing one when the owner died after their RBD can trigger the excise tax discussed below.

Successor beneficiaries, meaning people who inherit from someone who was already a beneficiary, do not get a fresh ten-year clock. You finish out whatever timeframe was already running.³

Who Can Still Stretch Distributions Over a Lifetime

A narrow group called “eligible designated beneficiaries” can still take distributions over their own life expectancy instead of following the ten-year rule:³

Surviving spouses (who also have the rollover option above).
Minor children of the account owner, not grandchildren, until they reach age 21, at which point the ten-year rule begins.
Disabled or chronically ill individuals as defined under federal standards.
Beneficiaries who are not more than ten years younger than the deceased owner.

People who inherited before January 1, 2020, are generally not subject to the ten-year rule and can keep using the life expectancy method that applied when they inherited.

If the Beneficiary Is Not a Person

When an IRA passes to an estate, a charity, or a trust that does not qualify as a “see-through” trust, the pre-SECURE rules apply. If the owner died before their RBD, the account must be emptied within five years. If the owner died on or after their RBD, distributions come out over the owner’s remaining life expectancy as if they had lived.³ A trust qualifies as see-through only if it is valid under state law, is irrevocable (or becomes so at the owner’s death), identifies its individual beneficiaries in the document, and the trustee gets required documentation to the IRA custodian.⁶

Calculating the Annual Amount When One Is Required

When annual withdrawals apply, the math takes two inputs: the account’s fair market value on December 31 of the previous year (your custodian reports this on the year-end statement), and a life expectancy factor from the Single Life Expectancy Table (Table I) in IRS Publication 590-B, based on the age you will reach during the current year.⁷ Divide the balance by the factor. That is your required amount for the year.

Each inherited IRA needs its own calculation. If you inherited more than one Traditional IRA from the same person, you can pull the combined total from just one of those accounts. IRAs inherited from different people cannot be combined for this purpose. Each must satisfy its own RMD.²

When one account names multiple beneficiaries, the account should be split into separate inherited IRAs by December 31 of the year after the owner’s death. Miss that deadline and every beneficiary must use the oldest beneficiary’s life expectancy, which usually means larger withdrawals for the younger heirs.

How Distributions Are Taxed

Withdrawals from an inherited Traditional IRA are taxed as ordinary income in the year received. There is no capital gains treatment.⁶ If the original owner made nondeductible contributions, part of each distribution comes out tax-free as a return of basis, and you use Form 8606 to work out the split.

Inherited Roth IRAs are usually friendlier. Qualified distributions of both contributions and earnings come out tax-free. If the owner’s Roth had not been open at least five tax years before they died, the earnings portion of distributions is taxable to you, but contributions still come out tax-free regardless.⁶

Penalties for Missing an RMD

If you do not withdraw the full required amount by the deadline, the IRS imposes a 25% excise tax on the shortfall, which is the gap between what you should have taken and what you actually took.⁸ SECURE 2.0 brought that rate down from 50%.

You can drop the tax to 10% by correcting the shortfall within the correction window. That means taking the missed amount and filing a return reflecting the correction before the earliest of these dates: the IRS sends a notice of deficiency, the tax is assessed, or the last day of the second tax year after the year the penalty applied.⁸

If the miss was a genuine mistake, the IRS can waive the penalty entirely. File Form 5329, attach a written explanation of what went wrong and how you have fixed it, and enter “RC” with the shortfall amount on the relevant line.⁹ The IRS reviews waiver requests individually and will let you know if it says no.

1
Federal Register. Required Minimum Distributions
2
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
3
Internal Revenue Service. Retirement Topics – Beneficiary
4
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
5
Internal Revenue Service. Notice 2024-35 – Certain Required Minimum Distributions for 2024
6
Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements (IRAs)
7
Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries
8
Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
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Internal Revenue Service. 2025 Instructions for Form 5329 – Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts