Which Rule Applies to Your Inherited IRA?
For deaths in 2020 or later, three questions decide everything. First, who inherited. A spouse, a minor child of the owner, a disabled or chronically ill person, and anyone not more than 10 years younger than the owner form a protected group with better options. Second, when the owner died. Third, whether the owner had reached their required beginning date for RMDs (the April 1 after turning 73 for most people dying today; 72 or 70½ for older cohorts). That last question quietly controls whether you owe a withdrawal every year or none until the end.
Here is the short map. A typical adult child or grandchild gets the 10-year rule, which means emptying the account by December 31 of the 10th year after death. The protected group can stretch withdrawals over life expectancy instead. And when no person is named at all (the estate inherits, or a trust that does not qualify as a see-through), the harshest rules apply, 5 years if the owner died before RMD age, or the owner’s remaining life expectancy if after. For the fuller story of how an IRA moves at death, start with what happens to your IRA when you die.
One more thing the rules never give you is a fresh start on taxes. Retirement accounts get no step-up in basis at death, so every dollar out of an inherited traditional IRA is ordinary income to you. That is why the timing questions on this page are really tax questions. It is also why parents holding large traditional IRAs increasingly prepay that tax during life; the strategy has its own guide, the Roth conversion window, and its own tool, our Roth conversion calculator.
How Does the 10-Year Rule Work?
The 10-year rule sounds simple. The account must reach zero by December 31 of the year containing the 10th anniversary of the owner’s death. Owner died in 2023, account empty by December 31, 2033. Anything left after the deadline is exposed to an excise tax of up to 25% of the amount that should have come out.
If the owner died before their required beginning date, that deadline is the whole rule. The IRS states it plainly. No distribution is required for any year before the 10th year. You choose the pace. For a traditional IRA, taking nothing for 9 years then a lump sum in year 10 often stacks the entire account into your highest bracket, so spreading withdrawals usually wins. For a Roth, the opposite is true. Qualified withdrawals are tax free, so most beneficiaries let it grow untouched until the deadline year.
If the owner died on or after their required beginning date, the 10-year deadline is only half the rule. The other half surprises almost everyone.
The Annual RMD Surprise in Years 1 Through 9
When the owner had already reached RMD age, the 2024 final regulations require the beneficiary to keep money flowing out every year, with an annual required minimum distribution in each of years 1 through 9, on top of the year-10 deadline. Commenters asked the IRS to drop this. It refused, and the requirement is enforced starting with the 2025 distribution year.
The annual amount uses your own single life expectancy. Find your factor in the IRS single life table for your age in the year after the owner died, then subtract one for each year since. Divide last December 31’s balance by the current factor and that is the year’s required withdrawal. A 54-year-old’s factor starts at 32.5; two years later it is 30.5, so a $500,000 balance means a withdrawal of about $16,400 that year. The calculator above runs this for you.
Because the rules were in limbo, the IRS waived the penalty for these annual withdrawals for 2021 through 2024. It did not waive the deadline. The 10-year clock kept running, and your factor kept shrinking through the waived years. If the death was in 2020 through 2023 and you have taken nothing, you are not in trouble yet, but the catch-up conversation should happen now, not in year 9.
Two honest caveats on the math. If you are older than the owner was, the rules can let you use a longer factor than your own. And a disabled or chronically ill beneficiary may not be under the 10-year rule at all. Both are worth five minutes at a consult before you rely on any number.
The rule is knowable. Your situation is the variable.
Death year, RBD status, beneficiary category. We confirm all three and put your withdrawal schedule in writing.
Book your free consultWho Still Gets the Lifetime Stretch?
Congress kept the old stretch alive for five categories, called eligible designated beneficiaries. They are a surviving spouse; the owner’s own child while under 21; a disabled person; a chronically ill person; and anyone not more than 10 years younger than the owner (a sibling close in age, for example). These beneficiaries can take withdrawals over their own life expectancy instead of racing a 10-year clock.
The minor-child rule has a built-in expiration. The stretch runs until the child’s 21st birthday; then the 10-year period begins, and the account must be empty by December 31 of the year the child turns 31. Note the fine print. This covers the owner’s child only. A minor grandchild does not qualify and lands in the regular 10-year rule.
A surviving spouse has the richest menu and the biggest trap. A spouse can take over the IRA as their own, roll it into their own IRA, stay a beneficiary with an annually recalculated life expectancy, or (if the owner died young) wait until the year the owner would have reached RMD age. But the elections interlock, and a spouse who simply skips a beneficiary RMD can be deemed to have taken the account as their own without meaning to, which changes the tax rules from that point on. This is why the calculator shows spouses their options instead of a single number.
Never Take a Check From an Inherited IRA
Here is the mistake that cannot be fixed. A non-spouse beneficiary is barred from rolling money into or out of an inherited IRA. There is no 60-day window. If the custodian cuts a check in your name, the IRS treats the entire amount as distributed to you, and for a traditional IRA that is all taxable income in one year, with no putting it back.
The only safe move is a direct trustee-to-trustee transfer, from custodian to custodian, into an inherited IRA that stays titled in the deceased owner’s name for your benefit (for example, "John Smith IRA, deceased, f/b/o Jane Smith, beneficiary"). If a bank teller, an advisor, or a well-meaning relative suggests "just cash it out and reinvest," stop. Ask for the transfer paperwork instead, and if anyone has already mailed you a check, call us before you deposit it.
One related duty falls in the death year itself. If the owner had reached RMD age and had not yet taken that year’s own RMD, the beneficiaries are responsible for taking it. Confirm it before December 31.
What Happens When an Estate or Trust Inherits an IRA?
When no living person is the named beneficiary, the IRA falls into its worst-case rules. An estate, a charity, or a trust that fails the IRS see-through tests is not a "designated beneficiary" at all. If the owner died before RMD age, the whole account must come out within 5 years. If after, withdrawals run over what was left of the owner’s own life expectancy. Either way the money also gets dragged through probate when the estate is the beneficiary, adding cost and months of delay to an asset that was built to skip probate entirely.
This usually is not a choice anyone made. It is a blank or outdated beneficiary form, one naming an ex-spouse, a predeceased parent, or nothing at all because the account was opened in 1998. A properly drafted trust can be a beneficiary when the plan calls for it, but the drafting has to meet the see-through requirements, and the tradeoffs deserve their own page, naming a trust as your IRA beneficiary.
If you are reading this as an account owner rather than a beneficiary, the fix is the cheapest work in estate planning, a beneficiary audit. We pull every account’s designation, check it against your plan, and repair the blanks before they become someone’s 5-year problem.
Frequently Asked Questions
Do I have to take an RMD from an inherited IRA every year?
It depends on whether the owner died before or on/after their required beginning date for RMDs. If the owner had already reached RMD age (73 for most people dying today) and died on or after that date, a beneficiary under the 10-year rule must take a withdrawal every year in years 1 through 9, based on the beneficiary’s single life expectancy, and still empty the account by year 10. If the owner died before that date, or the account is a Roth IRA, no annual withdrawal is required; the only deadline is the 10-year one. The 2024 final regulations settled this, and the annual requirement is enforced starting with 2025.
When must an inherited IRA be fully withdrawn?
Under the 10-year rule, by December 31 of the year containing the 10th anniversary of the owner’s death. If the owner died in 2023, the account must be empty by December 31, 2033. Eligible designated beneficiaries (a surviving spouse, a minor child of the owner, a disabled or chronically ill person, or someone not more than 10 years younger than the owner) can instead stretch withdrawals over life expectancy.
What is the penalty for missing an inherited IRA RMD?
An excise tax of up to 25% of the amount you should have withdrawn but did not, reduced to 10% if you correct the shortfall within the IRS correction window and file the required form. The IRS waived this penalty for annual RMDs missed by 10-year-rule beneficiaries in 2021 through 2024 while the rules were being finalized; enforcement began with the 2025 distribution year.
Does the 10-year rule apply to inherited Roth IRAs?
Yes. A non-spouse beneficiary must empty an inherited Roth IRA by the end of the 10th year after death. The good news is double. Roth owners are always treated as having died before their required beginning date, so no annual withdrawals are required along the way, and qualified withdrawals come out tax free. Many Roth beneficiaries leave the account growing until the deadline year.
Can I roll an inherited IRA into my own IRA?
Only a surviving spouse can. Everyone else is barred from rolling money into or out of an inherited IRA. The only safe way for a non-spouse to move the account to a new custodian is a direct trustee-to-trustee transfer into an inherited IRA still titled in the deceased owner’s name for your benefit. A check made out to you personally is a taxable distribution that cannot be reversed.
What if the owner died before 2020?
The SECURE Act rules on this page do not apply. Deaths before 2020 follow the older stretch rules, with life expectancy factors that also had a one-time reset when the IRS updated its tables in 2022. The math is different enough that this calculator does not attempt it; we sort those accounts out at a consult.
Do inherited IRAs get a step-up in basis?
No. Unlike a home or a brokerage account, retirement accounts never receive a step-up in basis at death. Every dollar withdrawn from an inherited traditional IRA is ordinary taxable income to the beneficiary, which is why the timing of withdrawals inside the 10-year window is a real tax-planning decision.
I inherited an IRA from my parent. What should I do first?
Sign nothing at the custodian until the account’s path is mapped. The money must move by direct trustee-to-trustee transfer into an inherited IRA still titled in your parent’s name for your benefit; a check made out to you cannot be undone, because a non-spouse beneficiary has no 60-day rollover, and the entire balance becomes taxable income at once. Then work out which payout rule applies to you. For most adult children it is the 10-year rule, with annual withdrawals in years 1 through 9 if your parent had already begun required distributions. The calculator above shows your schedule, and the free consult maps the rest.
Can I convert an inherited IRA to a Roth?
Not if you inherited from a parent or anyone other than your spouse. A non-spouse beneficiary cannot convert an inherited traditional IRA, and the workaround people trade online, withdrawing the money, paying the tax, and putting it into a Roth, does not work either. Roth contributions are capped at the annual limit and require earned income, and the withdrawal is fully taxable the moment it happens. Only a surviving spouse who treats the account as their own can convert it. What a parent can do is convert during life, at their own bracket, so the family inherits a Roth instead; that strategy is our Roth conversion window guide.
Common Situations
The quiet annual RMD. A daughter inherited her 79-year-old father’s traditional IRA in 2022 and was told she had 10 years, so she took nothing. She was half right. The deadline is 2032, but because her father died after his required beginning date, she owes a withdrawal every year, enforced since 2025. Her factor was set by her age in 2023 and drops by one each year. We map the catch-up, the current-year amount, and a withdrawal pace that does not detonate her tax bracket.
The check that could not be undone. A brother and sister each inherited half of an IRA. The brother asked the custodian to transfer his share custodian-to-custodian; the sister, told by a friend she had 60 days, took a check. His stayed tax-deferred inside the 10-year window. Hers became fully taxable income the day the check was cut, because non-spouse beneficiaries have no rollover. Ten minutes of paperwork was the entire difference; the rollover rules behind it are on our 60-day rollover rule guide.
The 1998 beneficiary form. A widower’s IRA still named his late wife, with no contingent beneficiary, so the account fell to his estate, meaning probate plus the 5-year rule for his kids. His will was fine; the form outranked it. A beneficiary audit while he was alive would have taken minutes and kept the IRA out of both traps.
Sources of Law
- IRS Publication 590-B (2025), Distributions from Individual Retirement Arrangements: beneficiary classification, the 10-year and 5-year rules, RMD ages, spouse options, the Roth before-RBD rule, the 25%/10% excise tax, and Appendix B Table I. irs.gov (retrieved 2026-08-11)
- T.D. 10001, final regulations under IRC §401(a)(9), 89 FR 58886 (July 19, 2024): annual RMDs in years 1 to 9 when death is on or after the required beginning date, applicable from the 2025 distribution year. IRS news release IR-2024-190. irs.gov (retrieved 2026-08-11)
- 26 CFR §§1.401(a)(9)-4 (eligible designated beneficiaries; age of majority at 21; see-through trusts), 1.401(a)(9)-5 (divisor mechanics, the minus-one method, ghost life expectancy), 1.401(a)(9)-9 (Single Life Table, applicable from 2022), and 1.408A-6 Q&A-14 (Roth treated as death before RBD). law.cornell.edu (retrieved 2026-08-11)
- IRS Notice 2024-35 (excise-tax relief for specified RMDs missed in 2024; prior relief for 2021 to 2023 under Notices 2022-53 and 2023-54). irs.gov (retrieved 2026-08-11)
Updated on August 17, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate and tax planning, business structuring, and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. This calculator is general information based on federal tax law as of the date above, not legal or tax advice, and produces an estimate only. The 2024 final regulations changed these rules, custodians differ in how they apply them, and your facts control; confirm your rule and amount before withdrawing.