If you inherited an IRA and the original owner had already started taking their own required minimum distributions, the inherited IRA RMD rules for 2025 require you to take an annual distribution every year of the 10-year payout window and empty the account by the end of year ten. The four-year penalty holiday the IRS granted while it finalized the SECURE Act regulations ended on January 1, 2025.1Internal Revenue Service. Notice 2024-35 – Certain Required Minimum Distributions for 2024 Miss a distribution now and the excise tax applies.
Who Owes Annual Distributions Starting in 2025
The annual-RMD requirement hits one specific group: non-spouse beneficiaries subject to the 10-year rule whose original IRA owner died on or after their required beginning date. If that describes you, the final regulations confirm you must take a distribution in each year of the 10-year window and fully distribute the account by December 31 of the tenth year after the owner’s death.1Internal Revenue Service. Notice 2024-35 – Certain Required Minimum Distributions for 2024
The required beginning date is generally April 1 of the year after the owner turns 73. For owners born in 1960 or later, that age moves to 75.2Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs If the owner had reached that date before dying, you are in the annual-RMD group.
This matters most if you inherited in 2020 or 2021 and have taken nothing. The IRS waived enforcement for 2021 through 2024, so you were not required to withdraw annually during those years. The waived years do not reduce your remaining obligation, though. A beneficiary who inherited in 2020 still has to empty the account by December 31, 2030, and now owes annual distributions for 2025 through 2029 plus a full liquidation in 2030. Because the account kept growing during the waived years, those remaining distributions will be larger than they would have been on a steady schedule.
If the owner died in 2024 or later on or after the required beginning date, no waiver period applies. Annual distributions begin the year after death.
When Annual RMDs Do Not Apply
Several situations fall outside the annual-RMD requirement, and misreading your scenario is the easiest way to either overpay tax or miss a distribution you actually owe.
Owner Died Before the Required Beginning Date
If the original owner had not yet reached their required beginning date, you owe no annual distributions during the 10-year window. You can take money out in any amount and on any schedule, as long as the balance reaches zero by December 31 of the tenth year after death. An owner who died at 65 in March 2022, for example, had not reached the required beginning date; the beneficiary simply has until December 31, 2032 to empty the account.
Inherited Roth IRAs
Roth IRA owners never take lifetime RMDs, so they never reach a required beginning date. Every Roth beneficiary is treated as inheriting from an owner who died before that date. No annual distributions are required during the 10-year window, and qualified withdrawals come out tax-free. The main question is how long to let the account grow before taking the money.
Eligible Designated Beneficiaries
The 10-year rule itself does not apply to a narrow group of heirs:3Internal Revenue Service. Retirement Topics – Beneficiary
- Surviving spouses, who can also roll the account into their own IRA and apply standard RMD rules based on their own age.
- Minor children of the original owner, until they reach the age of majority, at which point the 10-year clock starts.
- Disabled or chronically ill individuals.
- Beneficiaries not more than 10 years younger than the original owner.
These beneficiaries can still stretch distributions over their own life expectancy.
Inheritances Before 2020
If you inherited the account before January 1, 2020, the SECURE Act’s 10-year rule does not apply. You continue under the pre-SECURE rules, taking annual distributions based on your life expectancy using the IRS Single Life Expectancy table.4Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements
Calculating Your Annual Amount
When annual distributions are required, use the IRS Single Life Expectancy table (Table I in Publication 590-B). Look up your life expectancy factor for your age in the year after the owner’s death, then subtract one for each year that follows.4Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements
A beneficiary who was 50 in the year after the owner’s death starts with a factor of 36.2. The first annual RMD equals the account balance on the prior December 31 divided by 36.2. The next year uses 35.2, then 34.2, and so on. Each year’s distribution is the prior December 31 balance divided by that year’s reduced factor.
Your custodian can help identify the right factor, but the obligation to withdraw the correct amount sits with you. If the account grew during the waived years, the annual numbers from 2025 forward will reflect that larger balance.
The Owner’s Final-Year RMD
One obligation often gets missed in the first year. If the original owner died in a year they owed an RMD but had not yet taken it, you have to complete that distribution on their behalf. This is the owner’s RMD for the year of death, separate from anything you owe under the 10-year rule.5Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries A parent who died in September 2024 after reaching their required beginning date but before taking their 2024 distribution leaves that final 2024 withdrawal for the beneficiary to complete. Skipping it triggers the excise tax on the shortfall.
What a Missed Distribution Costs
The excise tax on a missed RMD is 25% of the amount you should have taken but did not. On a $20,000 required distribution, that is a $5,000 penalty. Older guides reference a 50% rate, but the SECURE 2.0 Act cut it to 25% for tax years beginning after December 2022.6Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
The penalty drops to 10% if you fix the mistake inside the correction window, which generally means taking the missed amount and filing the tax reflecting it within two years.6Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans Moving quickly is worth real money.
The waivers for 2021 through 2024 required no filing from eligible beneficiaries. Starting in 2025, there is no blanket relief. A missed distribution gets reported on Form 5329, with either payment of the 25% excise tax or a request for a waiver based on reasonable cause.7Internal Revenue Service. Instructions for Form 5329
Planning the 10-Year Drawdown
The annual RMD is a floor, not a ceiling. You can always take more, and in most cases you should think about doing so.
The expensive mistake is taking only the minimum for nine years and letting the account balloon into one giant final-year withdrawal. A $500,000 balance distributed in a single year can push a middle-income beneficiary into the top federal brackets. Spreading the money more evenly keeps each year’s tax rate lower.
Timing matters when your income varies. A year between jobs, a year with large deductible medical or charitable expenses, or a year before Social Security begins can be the right moment to accelerate withdrawals while your marginal rate is low. Working years after Social Security starts tend to be the wrong moment.
Inherited IRA distributions count as ordinary income, so they can also push you past the thresholds that increase Medicare premiums or raise the taxable portion of your Social Security. Running the numbers before year-end gives you room to adjust the withdrawal, rather than finding out in April.