Inherited IRA 10-Year Rule: RMDs, Penalties, and Exceptions

If you inherited an IRA from someone other than your spouse, the inherited IRA 10-year rule generally requires you to withdraw the entire balance by December 31 of the tenth year after the original owner’s death. So if the account holder died in 2024, the account must be empty by December 31, 2034.¹ Depending on the deceased owner’s age at death, you may also owe an annual withdrawal in each of years one through nine. Traditional IRA distributions are taxed as ordinary income; qualified Roth IRA distributions come out tax-free.

The rule was created by the SECURE Act of 2019 and refined by SECURE 2.0 in 2022. It replaced the old “stretch” approach that let heirs spread distributions across their own life expectancies.

Who the Rule Applies To

The 10-year rule covers most individual heirs who are not the account owner’s spouse: adult children, grandchildren, siblings, friends, and other named beneficiaries who do not fit one of the narrow exemptions below. In IRS terminology, these are “designated beneficiaries.”

A separate group, “eligible designated beneficiaries,” can still stretch distributions over their own life expectancy instead of using the ten-year window. You have to qualify as of the date the original owner died.² The categories are:

Surviving spouses, who also have additional options described below.
Minor children of the account owner. Only biological or legally adopted children qualify, not grandchildren, nieces, nephews, or stepchildren. The stretch treatment lasts until the child turns 21, at which point the ten-year clock starts and the account must be emptied by age 31. The age-21 threshold is set by federal law regardless of the state’s own age of majority.
Disabled or chronically ill individuals, who receive lifetime stretch treatment.
Individuals not more than ten years younger than the deceased owner, which commonly covers siblings or partners close in age.

If none of these apply to you, plan on the ten-year rule.

Do You Owe Annual Withdrawals During the Ten Years?

A common misunderstanding is that you can leave the account alone for nine years and empty it at the end. Whether that works depends on how old the original owner was when they died, relative to their required beginning date. For IRA owners, the required beginning date is April 1 of the year after they turn 73.³

If the Owner Died Before Their Required Beginning Date

You have full flexibility. No annual withdrawals are required in years one through nine. You can pull out any amount, at any time, as long as the balance is zero by the end of year ten. Many beneficiaries use this flexibility to concentrate withdrawals in years when their other income is lower.

If the Owner Died On or After Their Required Beginning Date

You must take annual minimum distributions in years one through nine, calculated using the IRS Single Life Expectancy Table based on your own age. Whatever balance remains at the end of year ten still has to come out then.¹

The IRS waived penalties for missed annual distributions from 2021 through 2024 while it finalized the regulations. Final regulations took effect on January 1, 2025, so beneficiaries who owe annual amounts can no longer skip them without consequence.⁴

Inherited Roth IRAs

Roth IRA owners are never required to take distributions during their own lifetimes, so they have no required beginning date.¹ That means annual RMDs during the ten-year window are never triggered for an inherited Roth. You only need to empty the account by December 31 of year ten. Because qualified Roth distributions are tax-free once the five-year holding period is met, the balance can keep growing tax-free for the full decade.⁵

Penalty for Missing a Distribution

Failing to take a required amount, whether an annual RMD or the final tenth-year balance, triggers a 25 percent excise tax on the shortfall. That drops to 10 percent if you correct the missed distribution during a correction window that generally runs through the end of the second tax year after the penalty was imposed.⁶

The excise tax is reported on Form 5329, filed with your annual income tax return. The reduced 10 percent rate is claimed on the same form.³

Planning Withdrawals to Reduce Taxes

Traditional IRA distributions are taxable, and a decade is short enough that big withdrawals can push you into a higher bracket. A few approaches help.

Spread withdrawals across the ten years. Roughly equal annual distributions usually beat waiting until year ten and taking everything at once, because concentrating income in a single year pushes more of it into higher brackets. If your other income fluctuates, you can adjust each year’s withdrawal accordingly.

Take more in low-income years. A gap between jobs, a sabbatical, or the first year of retirement can leave lower brackets unused. Pulling a larger distribution that year fills those brackets. In peak earning years, pull less and let the balance keep growing.

Coordinate with your own Roth conversions. If distributions from the inherited IRA will already raise your taxable income significantly, doubling up by converting your own Traditional IRA to a Roth the same year can stack too much income into one return.

Qualified charitable distributions. If you are at least 70½, you can direct distributions from an inherited Traditional IRA to a qualified charity through a QCD, which satisfies your RMD for the year without adding to your taxable income. The 2026 annual QCD limit is $111,000.⁶

Special Situations

Surviving Spouses

A surviving spouse has options no other beneficiary gets. You can roll the inherited IRA into your own IRA, which is usually the better long-term move if you do not need the money now: RMDs are then based on your own age using the Uniform Life Table (smaller withdrawals than the Single Life Expectancy Table), and you can delay RMDs until age 73. The tradeoff is that withdrawals before you turn 59½ carry the standard 10 percent early-withdrawal penalty.⁶

Alternatively, you can keep it as an inherited IRA. This makes sense if you are under 59½ and may need the money, because distributions from an inherited IRA are exempt from the 10 percent early-withdrawal penalty regardless of your age. RMDs then start the year after the original owner’s death, using the Single Life Expectancy Table. A spouse who keeps it as inherited can later roll it into their own IRA, but a rollover cannot be reversed. Spouses may also elect the 10-year rule, though it is a less common choice.

Multiple Inherited IRAs

If you inherited more than one IRA from the same person, you can calculate the RMD for each and take the combined total from a single account. You cannot aggregate RMDs across inherited IRAs received from different people, and you cannot combine inherited IRA RMDs with RMDs from your own retirement accounts.⁷ Inheriting from, say, a parent and an aunt means two separate timelines to track, and missing a required amount from one account is not cured by taking extra from another.

If You Inherit as a Successor Beneficiary

If a designated beneficiary subject to the ten-year rule dies before emptying the account, you as the successor do not get a fresh clock. You must empty the account by the same deadline that applied to the first beneficiary.² If you inherit from an eligible designated beneficiary who was using the stretch method, you switch to the ten-year rule measured from that person’s death.

Trusts as Beneficiary

If the IRA was left to a trust, the individuals named as trust beneficiaries can be treated as designated beneficiaries only if the trust meets four IRS requirements: it must be valid under state law, it must be irrevocable (or become irrevocable at the owner’s death), the beneficiaries must be identifiable from the trust document, and the trustee must provide required documentation to the IRA custodian.⁶ A trust that meets all four is often called a “see-through” trust. A trust that fails any of them is treated as having no designated beneficiary, which changes the distribution schedule entirely.

1
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
2
Internal Revenue Service. Retirement Topics – Beneficiary
3
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
4
Federal Register. Required Minimum Distributions
5
Internal Revenue Service. Roth IRAs
6
Internal Revenue Service. Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs)
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Internal Revenue Service. RMD Comparison Chart (IRAs vs. Defined Contribution Plans)