The short answer
If you inherited an IRA from someone who died after 2019 and you are not their spouse, you will most likely need to empty the account within 10 years. If the owner had already started required minimum distributions, you must also take a distribution every year along the way. Spouses, minor children, and a few others have more flexible options.
Which rules apply to you?
| Beneficiary | Payout rule | Annual withdrawals? |
|---|---|---|
| Surviving spouse | Can treat as own IRA, or stretch over life expectancy as an inherited IRA | Depends on the option chosen (see below) |
| Owner’s minor child | Life expectancy until age 21, then the 10-year rule | Yes, until 21 |
| Disabled or chronically ill beneficiary | Life expectancy (“stretch”) | Yes |
| Beneficiary not more than 10 years younger than the owner | Life expectancy (“stretch”) | Yes |
| Adult children, grandchildren, and most other individuals | Empty by the end of year 10 | Yes if the owner died on or after their required beginning date; no if before |
| Estate, charity, or a trust that doesn’t qualify as “see-through” | 5 years if the owner died before their required beginning date; otherwise over the owner’s remaining life expectancy | Depends on timing |
The first four rows are “eligible designated beneficiaries.” The required beginning date is April 1 of the year after the owner reaches RMD age: 73, or 75 for those born in 1960 or later.
The 10-year rule and the annual RMD catch
The SECURE Act ended the lifetime “stretch” for most heirs starting in 2020. Instead, the account must be fully withdrawn by December 31 of the tenth year after the owner’s death. For several years it was unclear whether heirs also had to take money out each year. The IRS settled that in its 2024 final regulations:
- Owner died before their required beginning date: no annual withdrawals are required. You can take money out whenever you like, as long as the account is empty by the end of year 10.
- Owner died on or after their required beginning date: you must take an annual required minimum distribution in years 1 through 9, based on your life expectancy, and empty the account by the end of year 10.
The penalty relief is over
The IRS waived the penalty for missed annual withdrawals from 2021 through 2024 while it finished the rules. Starting in 2025, those withdrawals are required, and a missed amount is subject to a 25% excise tax (10% if corrected promptly). The waivers did not extend the 10-year deadline: an IRA inherited in 2021 still has to be emptied by the end of 2031.
One more trap: if the owner died before taking their own RMD for the year of death, the beneficiary must take it by the end of that year.
A worked example: timing can cost six figures
An adult child with about $300,000 of other taxable income (married filing jointly) inherits a $1,000,000 traditional IRA under the 10-year rule. Compare two approaches, ignoring investment growth to keep it simple:
| Approach | Extra federal tax | Effective rate |
|---|---|---|
| Wait and withdraw all $1,000,000 in year 10 | $345,969 | 34.6% |
| Withdraw $100,000 a year for 10 years | $240,000 | 24.0% |
| Difference | $105,969 |
Uses 2026 married-filing-jointly brackets held constant. Hypothetical and simplified for illustration; actual results depend on growth, income changes, deductions, and future tax law.
Spreading withdrawals keeps every dollar in the 24% bracket instead of pushing much of it into the 32%, 35%, and 37% brackets. Lower-income years, such as a career break or early retirement, are often the best time to take more. The extra income can also affect Medicare premiums and other income-based thresholds, so the withdrawal schedule belongs in your overall tax plan. See our tax planning approach.
Options for a surviving spouse
Spouses have the most flexibility, and the right choice usually depends on age:
- Treat it as your own (or roll it into your IRA). RMDs are based on your own age, which can delay them if you are younger than your spouse was. Withdrawals before 59½ may face the 10% penalty.
- Keep it as an inherited IRA. Withdrawals are penalty-free at any age, and required distributions can wait until your spouse would have reached RMD age. This often suits a younger surviving spouse who may need the money before 59½. You can generally switch to treating it as your own later.
Inherited Roth IRAs and 401(k)s
Inherited Roth IRA
The 10-year rule applies, but annual withdrawals are not required, because Roth owners have no lifetime RMDs. If the original Roth had been open at least five years, withdrawals are generally tax-free, so many heirs let the account grow for the full ten years and withdraw at the end. This is one reason Roth conversions can be a powerful legacy tool; see our Roth conversion guide.
Inherited 401(k) or 403(b)
The same beneficiary rules apply. Many plans require beneficiaries to take the money out quickly, so a non-spouse beneficiary usually moves it by direct trustee-to-trustee transfer into an inherited IRA, which preserves the 10-year window. Avoid taking a check: a non-spouse beneficiary cannot complete a 60-day rollover, and the full amount would become taxable.
Setting up an inherited IRA correctly
- Title it as an inherited IRA, typically “[Owner’s name], deceased, for the benefit of [your name].” Do not move it into your own IRA unless you are the spouse.
- Move it only by direct transfer, custodian to custodian. A distribution paid to you cannot be put back.
- No 10% penalty applies to inherited IRA withdrawals, regardless of your age.
- Name your own beneficiaries for the inherited IRA. If you die before it is emptied, your heirs generally continue the original schedule.
Trusts as IRA beneficiaries
Naming a trust as beneficiary can protect young, vulnerable, or spendthrift heirs, but the trust must be drafted to qualify as a “see-through” trust, or the account can be forced out faster. Whether the trust passes withdrawals straight to the beneficiary (a conduit trust) or keeps them (an accumulation trust) also matters, because money retained inside a trust is taxed at compressed trust rates, reaching 37% at just $16,000 of income in 2026. See revocable vs. irrevocable trusts and how to fund a trust, and work with your estate attorney on the trust language.
Pennsylvania: inheritance tax on IRAs
Separately from income tax on withdrawals, an IRA may be subject to Pennsylvania inheritance tax at the owner’s death. Under Department of Revenue guidance, a traditional IRA is generally not taxable if the owner died before age 59½ (unless disabled), and generally is taxable at 59½ or older: 4.5% for children and grandchildren, 0% for a spouse. Paying within three months earns a 5% discount. See our Pennsylvania inheritance tax guide.
Frequently asked questions
What is the 10-year rule for inherited IRAs?
For IRA owners who died after 2019, most non-spouse beneficiaries, such as adult children, must empty an inherited IRA by December 31 of the tenth year after the year of death. If the original owner had already reached the age when required minimum distributions begin, the beneficiary must also take annual distributions in years one through nine.
Do I have to take an RMD from an inherited IRA every year?
It depends on when the owner died. If the owner died on or after their required beginning date, most beneficiaries under the 10-year rule must take annual required minimum distributions in years one through nine and empty the account by year ten. If the owner died before that date, annual distributions are generally not required, but the account must still be emptied within ten years. The IRS waived penalties for missed annual distributions for 2021 through 2024; starting in 2025, they are required.
What are a surviving spouse’s options for an inherited IRA?
A surviving spouse can treat the IRA as their own or roll it into their own IRA, which applies their own required minimum distribution age, or keep it as an inherited IRA, which allows penalty-free withdrawals before age 59 and a half and can delay required distributions until the deceased spouse would have reached RMD age. The best choice usually depends on the surviving spouse’s age and need for access.
Are inherited Roth IRAs subject to the 10-year rule?
Yes. Most non-spouse beneficiaries must empty an inherited Roth IRA within ten years, but annual withdrawals are not required in the meantime because Roth owners have no lifetime required distributions. Withdrawals are generally tax-free if the original Roth account had been open at least five years, so many heirs let the account grow and withdraw near the end of the ten years.
Do I pay taxes on an inherited IRA?
Withdrawals from an inherited traditional IRA are taxed as ordinary income in the year you take them, but there is no 10% early-withdrawal penalty regardless of your age. Inherited Roth IRA withdrawals are generally tax-free. The account may also have been subject to estate or state inheritance tax at the owner’s death, such as Pennsylvania’s inheritance tax, depending on the owner’s age.
What happens if I miss an inherited IRA required distribution?
A missed required minimum distribution is subject to a 25% excise tax on the shortfall, reduced to 10% if the mistake is corrected within the correction window. Take the missed amount as soon as you discover it and ask your tax preparer about requesting a waiver for reasonable error on Form 5329.