Required Minimum Distribution Rules for IRA Beneficiaries

The required minimum distribution rules for IRA beneficiaries turn on two questions: which category of beneficiary you are, and whether the account owner had reached their Required Beginning Date before dying. A surviving spouse has the most flexibility. A narrow group of close relatives and disabled or chronically ill beneficiaries can stretch withdrawals over their own lifetimes. Most other individual heirs must empty the account within ten years, and in many cases must take annual distributions along the way.

Which Beneficiary Category You Fall Into

The IRS puts every beneficiary into one of three groups, and your group sets your timeline before any math begins.

An eligible designated beneficiary (EDB) qualifies for the longest payout. You are an EDB if you are the surviving spouse, a minor child of the account owner (not a grandchild), disabled or chronically ill as defined under the Internal Revenue Code, or not more than ten years younger than the deceased owner.¹ A minor child holds EDB status only until age 21; at that point the 10-year clock starts and the account must be emptied within ten years.

Disabled or chronically ill status cannot be self-certified. You need a certification from a licensed health care practitioner confirming the condition as of the date of the owner’s death. A beneficiary already receiving Social Security disability benefits or SSI when the owner died automatically qualifies.

A non-eligible designated beneficiary is any other individual named on the beneficiary form: adult children, grandchildren, siblings, friends. This group is subject to the 10-year rule.²

A non-designated beneficiary is a non-person entity: estates, charities, and most trusts that don’t qualify as “see-through” trusts. These follow the pre-SECURE Act rules. If the owner died before their Required Beginning Date, the entire account must be emptied within five years. If the owner died after that date, distributions are based on the owner’s remaining life expectancy.¹

The 10-Year Rule

If you inherited an IRA from someone who died in 2020 or later and you’re a non-eligible designated beneficiary, the account must be fully distributed by December 31 of the tenth calendar year after the owner’s death.¹ What that looks like along the way depends entirely on the owner’s Required Beginning Date.

The Required Beginning Date is April 1 of the year after the IRA owner turns 73.³ The age rises to 75 for individuals born in 1960 or later, effective in 2033. For now, the relevant age is 73.

Owner Died Before the Required Beginning Date

You have no annual withdrawal obligation during years one through nine. The account can grow untouched and be withdrawn in a single lump in year ten, or you can take partial withdrawals in any pattern you choose, as long as the balance hits zero by the year-ten deadline.

Owner Died On or After the Required Beginning Date

Now you must take annual distributions in years one through nine and empty whatever remains in year ten. Skipping a year is not permitted.⁴ Starting with the 2025 calendar year, the final regulations are in force, and the annual RMDs must be taken. The transition-year penalty waivers the IRS granted for 2021 through 2024 have ended.⁵

Lifetime Stretch for Eligible Designated Beneficiaries

An EDB can stretch distributions over their own life expectancy instead of squeezing everything into ten years. Annual distributions begin the calendar year after the owner’s death. Each year’s amount is the prior year-end balance divided by the beneficiary’s life expectancy factor from IRS Table I (the Single Life Expectancy Table).⁴

The stretch lasts only while EDB status lasts. A minor child’s stretch ends at age 21, and the 10-year rule takes over from there. A disabled or chronically ill beneficiary can continue the stretch for life.⁶

Surviving Spouse Options

A surviving spouse has choices no other beneficiary has. The two main paths lead to very different RMD calendars.

Roll the IRA Into Your Own

You can transfer the inherited assets into an IRA in your own name. That resets everything. You follow your own RMD schedule starting at age 73, you name new beneficiaries, and you can make contributions like any account you funded yourself.³

The trade-off is access. Withdrawals before age 59½ from your own IRA are subject to the 10% early withdrawal penalty. That penalty doesn’t apply to distributions from an inherited IRA left in beneficiary form, because the tax code exempts distributions made to a beneficiary after the owner’s death.⁷

Keep It as an Inherited IRA and Use the SECURE 2.0 Election

Under SECURE 2.0 rules effective in 2024, a surviving spouse who keeps an inherited IRA can elect to be treated as if they were the deceased owner for RMD purposes. When the owner died before their Required Beginning Date, this election is automatic.⁸

Under the election, RMDs are delayed until the year the deceased owner would have turned 73. When they begin, they’re calculated using the Uniform Lifetime Table, which produces smaller required distributions than the Single Life Table. The account stays in inherited form, so the 10% early withdrawal penalty never applies, regardless of the spouse’s age. If the older spouse inherits from a younger owner who had already passed their Required Beginning Date, the RMD is the greater of the surviving spouse’s Uniform Lifetime Table factor or the owner’s remaining life expectancy. A rollover into the spouse’s own IRA remains available later.

Calculating the Annual Amount

The formula is the same across scenarios: prior year-end balance divided by the applicable life expectancy factor. What changes is which factor you use.

EDBs Using the Life Expectancy Method

EDBs other than surviving spouses use Table I. Look up the factor for your age in the year after the owner’s death. That’s your starting divisor. Each subsequent year, subtract one. A starting factor of 40.0 becomes 39.0, then 38.0.⁴

A surviving spouse using the SECURE 2.0 election calculates RMDs from the Uniform Lifetime Table (Table III), recalculated each year based on their current age.

Annual RMDs Inside the 10-Year Window

When the 10-year rule applies and the owner died after their Required Beginning Date, years one through nine use the owner’s life expectancy factor from Table I: the owner’s age in the year of death, reduced by one each year after.⁹ Year ten is whatever remains in the account.

When the owner died before their Required Beginning Date, no annual minimums apply during years one through nine. The only deadline is emptying the account by year ten.

The Year-of-Death RMD

If the original owner died partway through the year without taking their full RMD, the beneficiary must complete it. That’s the owner’s RMD for the year of death, calculated using the owner’s age and life expectancy factor. If the owner had already taken their full annual distribution before dying, the beneficiary owes nothing extra for that calendar year.⁹

Multiple Inherited Accounts

If you inherited more than one traditional IRA from the same person, calculate the RMD separately for each. Once you know the total, you can pull it from any one of those accounts or split it across them. You cannot aggregate inherited IRAs from different deceased owners, and you cannot satisfy an inherited IRA’s RMD from a non-inherited IRA you own.

Inherited Roth IRAs

The distribution timelines for inherited Roth IRAs match those for inherited traditional IRAs. Non-eligible designated beneficiaries face the 10-year rule. EDBs can stretch. A surviving spouse can roll over.¹

What differs is tax. Withdrawals of contributions from an inherited Roth are always tax-free. Withdrawals of earnings are tax-free if the Roth had been open at least five years at the owner’s death; earnings from a younger account may be taxable. Because Roth distributions are generally tax-free, waiting until year ten to take the full balance often maximizes tax-free growth rather than creating a tax problem. The one place annual amounts still matter: when the owner died after their Required Beginning Date and the beneficiary is a non-eligible designated beneficiary, the annual RMD requirement still technically applies.

Successor Beneficiaries

If a beneficiary dies before the inherited IRA is fully distributed, the next person in line is a successor beneficiary, and the rules tighten.⁶

If the original beneficiary was an EDB stretching over their lifetime, the successor does not continue the stretch. Instead, the successor has ten years from the original beneficiary’s death to empty the account. If the original beneficiary was already taking annual RMDs, the successor must continue them during the new 10-year window. If the original beneficiary was already on the 10-year rule, the successor doesn’t get a fresh clock; whatever time was left on the original 10-year period is all the successor has. Any unpaid year-of-death RMD from the original beneficiary also falls to the successor.

Penalties for a Missed RMD

Missing an RMD triggers a 25% excise tax on the shortfall between what you should have taken and what you actually withdrew.³ The rate drops to 10% if you fix the error within the IRS “correction window”: withdraw the missed amount and file a return reflecting the reduced tax. The correction window runs from the date the tax is imposed until the earliest of three deadlines: the date the IRS mails a notice of deficiency, the date the IRS assesses the tax, or the last day of the second tax year after the year the excise tax was imposed.¹⁰ For most people, that third deadline gives roughly two years.

If the miss was a genuine mistake, you can request a full waiver. File Form 5329 for the year of the missed distribution, enter “RC” (reasonable cause) on the appropriate line, and attach a written explanation of what happened and how you fixed it. The IRS reviews each request individually.¹¹

SECURE 2.0 also imposed a three-year statute of limitations on the RMD excise tax. The clock starts on the due date (without extensions) of the tax return for the year of the missed distribution. After three years, the IRS can no longer assess the penalty for that year, and no Form 5329 filing is required to trigger the limitations period.

How Distributions Are Taxed and Reported

Distributions from an inherited traditional IRA are taxed as ordinary income in the year received, the same treatment the original owner would have gotten. Your custodian reports each distribution on Form 1099-R using distribution code 4 (death benefit), which tells the IRS the payment came from a deceased owner’s account.¹²

Inherited Roth distributions are generally excluded from taxable income, with the five-year exception noted above for earnings. State treatment varies: some states fully tax inherited IRA distributions, others offer partial exclusions, and some have no income tax. Because a large year-ten withdrawal can push a beneficiary into a higher bracket, spreading traditional-IRA withdrawals across the 10-year window is a common way to manage the tax bill.

1
Internal Revenue Service. Retirement Topics – Beneficiary
2
Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements
3
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
4
Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements
5
Internal Revenue Service. Notice 2024-35 – Certain Required Minimum Distributions for 2024
6
Office of the Law Revision Counsel. 26 USC 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans
7
Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
8
Internal Revenue Service. Internal Revenue Bulletin 2024-33
9
Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries
10
Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
11
Internal Revenue Service. Instructions for Form 5329 – Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts
12
Internal Revenue Service. Instructions for Forms 1099-R and 5498