What Are the New Rules for Inherited IRA Distributions? Latest IRS Update

What are the new rules for inherited ira distributions? The latest IRS guidance confirms that beneficiaries must follow different withdrawal schedules depending on when the original account owner died, the type of beneficiary, and whether the owner had reached the required beginning date for distributions. The 10-year rule remains central to many inherited individual retirement accounts (IRAs), while surviving spouses and certain eligible beneficiaries can qualify for different arrangements.

The IRS finalized important required minimum distribution (RMD) regulations in 2024, with the rules generally applying to distribution years beginning in 2025. IRS Publication 590-B for 2025 provides guidance for beneficiaries preparing for the 2026 distribution year.

For Americans who inherit retirement savings, understanding these requirements matters for tax planning and avoiding penalties. A beneficiary may have to withdraw money every year, empty the account by a specific deadline, or follow a combination of annual distribution and final-withdrawal requirements.

The rules also distinguish between traditional IRAs and inherited Roth IRAs in important ways. Although qualified Roth IRA distributions generally receive favorable tax treatment, beneficiaries still must follow applicable distribution deadlines.

What Are the New Rules for Inherited IRA Distributions in 2026?

The most important point is that most non-spouse individual beneficiaries who inherit an IRA from someone who died after 2019 must empty the account by December 31 of the 10th year following the owner’s death.

However, the deadline does not automatically mean that every beneficiary can wait until the final year to withdraw everything. If the original owner had already reached the required beginning date for minimum distributions, many beneficiaries must continue taking annual RMDs during the 10-year period.

The applicable requirements generally fall into several categories:

• The 10-year rule: Most designated beneficiaries who do not qualify for an exception must distribute the entire inherited IRA within 10 years.
• Annual RMDs: Certain beneficiaries must take annual minimum distributions during the 10-year period.
• Life expectancy distributions: Eligible designated beneficiaries may qualify to take distributions over their life expectancy.
• Special spousal rules: A surviving spouse may be able to treat an inherited IRA as their own or retain beneficiary status.
• Different rules for older inheritances: Accounts inherited from people who died before 2020 generally follow earlier distribution provisions.

The beneficiary’s status and the deceased owner’s circumstances determine which rules apply. No single withdrawal schedule works for every inherited IRA.

Understanding the 10-Year Rule for Inherited IRAs

The 10-year rule is one of the most significant requirements affecting people who inherit retirement accounts. The SECURE Act of 2019 introduced this requirement for many beneficiaries who inherit IRAs from owners who died after December 31, 2019.

Under this rule, most non-spouse designated beneficiaries must withdraw the entire account balance by December 31 of the 10th year after the original owner’s death.

For example, if an IRA owner died in 2025, the beneficiary generally must empty the inherited IRA by December 31, 2035. If the owner died in 2026, the final deadline generally falls on December 31, 2036.

The deadline applies to the remaining account balance, not simply to a particular percentage of the original amount.

Beneficiaries should understand three important points:

• The account does not necessarily need to be emptied immediately after the owner’s death.
• Annual RMDs may apply before the 10-year deadline.
• The beneficiary can often withdraw more than the annual minimum, provided the account is fully distributed by the applicable deadline.

The 10-year rule does not apply identically to every beneficiary. Surviving spouses and certain other eligible designated beneficiaries can qualify for different distribution schedules.

Federal rules also distinguish designated beneficiaries from non-individual beneficiaries, such as estates. Depending on the circumstances, an estate may face a different distribution schedule, including a five-year rule.

Do Inherited IRA Beneficiaries Have to Take Annual RMDs?

Yes, some beneficiaries must take annual required minimum distributions in addition to complying with the 10-year deadline.

The original account owner’s age and distribution status at death play an important role in determining whether annual withdrawals apply.

When the original owner died on or after the required beginning date, a non-eligible designated beneficiary generally must continue annual RMDs during years one through nine. The beneficiary must then distribute the remaining balance by the end of year 10.

When the owner died before the required beginning date, a beneficiary subject to the 10-year rule generally does not have to take annual RMDs during the first nine years. However, the entire account must still be emptied by the deadline.

The required beginning date is the date by which an account owner must start taking required minimum distributions under the applicable rules.

Example of Annual Distribution Requirements

Consider a person who inherits an IRA from a parent who had already started taking RMDs.

The beneficiary may need to calculate annual withdrawals under the applicable beneficiary rules. Even if the beneficiary withdraws the required minimum each year, the remaining account balance must be fully distributed by the 10-year deadline.

This distinction matters because many people mistakenly believe they can leave the entire inherited IRA untouched until the final year.

The safest approach is to establish both the annual distribution schedule and the final account-emptying deadline before making withdrawal decisions.

Who Qualifies for an Exception to the 10-Year Rule?

Federal law recognizes several categories of eligible designated beneficiaries. These beneficiaries may qualify for life expectancy distributions instead of the standard 10-year withdrawal requirement.

The main categories include:

• Surviving spouses: A surviving husband or wife may have several options for handling the inherited account.
• Minor children of the original account owner: A qualifying minor child can generally use life expectancy distributions while eligible, subject to a later 10-year distribution period.
• Disabled individuals: Beneficiaries who meet the applicable federal definition of disability may qualify for special treatment.
• Chronically ill individuals: Certain beneficiaries who meet the statutory definition of chronic illness can qualify.
• Individuals not more than 10 years younger than the deceased owner: These beneficiaries may qualify for life expectancy treatment.

These exceptions depend on the beneficiary meeting the relevant legal definitions. A person does not automatically qualify merely because they are young, have a medical condition, or are financially dependent on the deceased.

For eligible beneficiaries who use life expectancy distributions, annual withdrawals generally begin under the applicable schedule. In some cases, a separate 10-year deadline applies later, such as when an eligible designated beneficiary dies or a minor child reaches the applicable age of majority.

The precise timing depends on the beneficiary category and the circumstances surrounding the original owner’s death.

How the Rules Apply to a Surviving Spouse

A surviving spouse generally has more flexibility than other inherited IRA beneficiaries.

Depending on the circumstances, the spouse may choose to treat the inherited traditional IRA as their own or continue holding it as an inherited account.

Option 1: Treat the IRA as Your Own

A surviving spouse may be able to transfer the inherited assets into their own IRA or otherwise elect ownership treatment under the applicable rules.

Once the account qualifies as the spouse’s own IRA, the normal rules for IRA owners apply. This can change when required distributions begin and how they are calculated.

For example, a surviving spouse who treats an inherited traditional IRA as their own generally follows the RMD rules applicable to their age and account type.

This option may be attractive when the spouse does not need immediate access to the inherited retirement savings.

However, the spouse should consider their age, cash-flow requirements, tax situation, and potential early-withdrawal consequences before making a decision.

Option 2: Keep the Account as an Inherited IRA

The spouse may instead retain beneficiary status.

This approach can offer different distribution timing, depending on the deceased owner’s age and whether the spouse has reached the relevant distribution milestones.

A spouse who inherits a traditional IRA does not have to make the same choices as a non-spouse beneficiary. The available options depend on the facts of the inheritance.

Before completing a transfer, the surviving spouse should confirm the intended treatment with the IRA custodian and a qualified tax professional.

Inherited Roth IRA Distribution Rules

Inherited Roth IRAs follow many of the same beneficiary distribution deadlines as inherited traditional IRAs. However, the income-tax treatment of withdrawals can differ substantially.

An original Roth IRA owner does not have to take lifetime RMDs. After the owner’s death, beneficiaries must follow the applicable inherited-account distribution rules.

For most non-spouse designated beneficiaries, the 10-year rule requires the entire inherited Roth IRA to be distributed by the end of the 10th year following the owner’s death.

Unlike many traditional IRA withdrawals, qualified Roth IRA distributions generally are not included in taxable income. Whether a distribution qualifies depends on the applicable Roth IRA rules, including the five-year holding-period requirement.

A beneficiary should not assume that every Roth IRA withdrawal is automatically tax-free. If the account has not satisfied the applicable qualification requirements, some earnings may receive different tax treatment.

The distribution deadline also remains important even when withdrawals are not taxable.

Do Inherited Roth IRAs Require Annual Withdrawals?

For many non-eligible designated beneficiaries subject to the 10-year rule, the inherited Roth IRA generally does not require annual distributions during the first nine years because the original owner is treated as having died before the required beginning date.

However, the beneficiary must distribute the entire balance by the end of year 10.

Eligible designated beneficiaries may qualify for alternative schedules. Surviving spouses also have special options.

Beneficiaries should verify the account’s history, ownership details, and applicable distribution requirements before deciding how long to retain the assets.

How Are Inherited IRA Withdrawals Taxed?

The tax consequences depend on whether the inherited account is a traditional IRA or a Roth IRA and whether the distribution qualifies for favorable tax treatment.

Traditional Inherited IRA

Distributions from a traditional inherited IRA are generally taxable as ordinary income to the extent the account contains untaxed contributions, earnings, or other pre-tax amounts.

A large withdrawal in a single tax year can increase the beneficiary’s taxable income. It may also affect income-based calculations and other tax considerations.

For that reason, beneficiaries often evaluate whether to spread withdrawals across several years rather than taking the entire balance at once.

However, tax planning cannot override the required distribution deadline. If the 10-year rule applies, the beneficiary must empty the account on time.

Inherited Roth IRA

Qualified distributions from an inherited Roth IRA are generally tax-free.

The beneficiary must still follow the applicable withdrawal schedule. Failure to distribute the account by the deadline can trigger an excise tax on the amount that remains undistributed.

The tax treatment of an inherited Roth IRA depends on the account’s qualification status and the applicable distribution rules.

Can Beneficiaries Roll Over an Inherited IRA?

A non-spouse beneficiary generally cannot treat an inherited IRA as their own or roll its assets into their personal IRA.

A qualifying trustee-to-trustee transfer may be possible if the account remains properly titled as an inherited IRA for the beneficiary.

Surviving spouses have additional options, including certain transfers and ownership elections.

Beneficiaries should avoid withdrawing inherited IRA funds with the intention of depositing them into their personal IRA. Such a transaction generally does not qualify as a permitted rollover for a non-spouse beneficiary.

What Happens If You Miss an Inherited IRA Distribution Deadline?

Missing an applicable required minimum distribution can result in an IRS excise tax.

Under current federal law, the standard excise tax for an insufficient distribution is generally 25% of the shortfall. The rate may fall to 10% if the taxpayer qualifies for the correction provision and meets its requirements.

The penalty applies to the amount that should have been distributed but was not, rather than automatically applying to the entire inherited IRA balance.

For example, if a beneficiary was required to withdraw a minimum amount but took less than that amount, the shortfall may be subject to the excise tax.

A separate deadline problem can arise when a beneficiary fails to empty the inherited account by the end of the required five-year or 10-year period.

Beneficiaries should not assume that an account custodian will automatically calculate and complete every required distribution. The beneficiary remains responsible for understanding and satisfying the applicable tax requirements.

If a distribution deadline has already been missed, the beneficiary should determine the shortfall, review whether correction relief applies, and consult a tax professional about the required reporting.

How to Calculate an Inherited IRA RMD in 2026

The method for calculating a beneficiary’s RMD depends on the beneficiary category and the applicable distribution schedule.

For certain beneficiaries using life expectancy rules, the calculation generally uses the inherited account balance and an applicable life expectancy factor.

A beneficiary’s calculation may require:

1. The inherited IRA’s relevant year-end account balance.
2. The beneficiary’s applicable life expectancy factor, where required.
3. Information about the deceased owner’s age and distribution status.
4. Confirmation of any special beneficiary rules or deadlines.

For eligible beneficiaries using life expectancy distributions, the IRS provides tables and instructions for determining the applicable factor.

The calculation differs for a beneficiary subject to annual RMDs under the 10-year rule and for someone who qualifies for a different schedule.

An inherited IRA should also remain separate from the beneficiary’s own IRA for RMD calculations. A beneficiary generally cannot use a withdrawal from their personal IRA to satisfy the inherited account’s distribution requirement.

Because the calculations can vary, beneficiaries should consult the applicable IRS distribution instructions and their account custodian before making a withdrawal.

Important Inherited IRA Deadlines to Remember

The following examples illustrate the usual final year for a 10-year distribution period when the standard rule applies.

These examples apply to beneficiaries subject to the standard 10-year rule. Exceptions, older inheritance rules, and other beneficiary-specific provisions can change the applicable schedule.

The deadline is generally December 31 of the year containing the 10th anniversary of the owner’s death. Beneficiaries should confirm the precise deadline for their account rather than relying on a general table.

What Beneficiaries Should Do Before Taking a Distribution

Before withdrawing inherited retirement savings, beneficiaries should establish the account’s exact status.

First, confirm the original owner’s date of death. That date helps determine whether the older rules or the post-2019 distribution requirements apply.

Second, establish whether the beneficiary is a surviving spouse, an eligible designated beneficiary, another designated beneficiary, or a non-individual beneficiary such as an estate.

Third, determine whether the original owner had begun taking RMDs. That information can affect whether annual withdrawals are required during the 10-year period.

Fourth, verify the account type. Traditional and Roth IRAs can have different tax consequences even when their distribution deadlines follow similar rules.

Finally, request a written distribution schedule from the IRA custodian and verify it against the applicable IRS requirements.

These steps can help beneficiaries avoid missed deadlines, unnecessary taxes, and costly distribution mistakes.

Frequently Asked Questions

1. What are the new rules for inherited IRA distributions in 2026?

Most non-spouse designated beneficiaries who inherit an IRA from someone who died after 2019 must empty the account within 10 years. Some beneficiaries must also take annual RMDs. Eligible designated beneficiaries and surviving spouses may qualify for different rules.

2. Can I wait until the 10th year to withdraw my inherited IRA?

That depends on the applicable distribution schedule. If annual RMDs apply, you generally must take them during the 10-year period and distribute the remaining balance by the final deadline.

3. Do inherited IRAs have to be emptied within 10 years?

Many inherited IRAs do, particularly those inherited by non-spouse designated beneficiaries after 2019. However, eligible designated beneficiaries, surviving spouses, and certain other beneficiaries may qualify for different requirements.

4. Are inherited IRA distributions taxable?

Traditional inherited IRA withdrawals are generally taxable to the extent they represent untaxed amounts. Qualified inherited Roth IRA distributions are generally tax-free, although the applicable qualification requirements still matter.

5. Can a surviving spouse keep an inherited IRA?

Yes. A surviving spouse may be able to retain the account as an inherited IRA or treat it as their own, depending on the circumstances. Each choice can affect distribution timing and taxation.

6. What is the penalty for missing an inherited IRA RMD?

The standard federal excise tax is generally 25% of the amount not distributed on time. The rate may be reduced to 10% when the taxpayer meets the applicable correction requirements.

7. Do inherited Roth IRAs have a 10-year withdrawal deadline?

Many inherited Roth IRAs are subject to the 10-year rule. Certain eligible beneficiaries can qualify for alternative distribution schedules, and surviving spouses have additional options.

8. Can I transfer an inherited IRA to my own IRA?

A non-spouse beneficiary generally cannot transfer an inherited IRA into their own IRA. A properly titled trustee-to-trustee transfer may be permitted. Surviving spouses have broader options under the applicable rules.

9. Do the new inherited IRA rules apply to accounts inherited before 2020?

Generally, accounts inherited from owners who died in 2019 or earlier follow different rules. The applicable requirements depend on the original owner’s date of death and the beneficiary’s circumstances.

10. Where can I check the current inherited IRA distribution requirements?

IRS Publication 590-B explains IRA distribution requirements, beneficiary categories, life expectancy calculations, and applicable deadlines. Beneficiaries should also confirm account-specific details with their IRA custodian or a qualified tax professional.

Final Thoughts

Inherited IRA distribution rules can significantly affect when beneficiaries receive retirement savings and how much tax they owe. The 10-year rule remains a central requirement for many non-spouse beneficiaries, but annual RMDs, spousal elections, and eligible beneficiary exceptions can change the applicable schedule.

Understanding the original owner’s date of death, account type, and distribution history is essential before making withdrawal decisions. Careful planning can help beneficiaries meet IRS deadlines while managing the tax consequences of inherited retirement assets.

Have you inherited an IRA or are you trying to understand the latest distribution requirements? Share your questions in the comments and stay informed about important retirement tax updates.