The inherited IRA 10-year rule requires many non-spouse beneficiaries to withdraw the entire balance of an inherited IRA by December 31 of the year containing the 10th anniversary of the original owner’s death.1 Under final Treasury regulations that apply to distribution calendar years beginning on or after January 1, 2025, some of those beneficiaries must also take annual distributions during that 10-year window.2
This article explains who the rule applies to, which beneficiaries qualify for different treatment, how the owner’s age at death affects annual distributions, how inherited Roth IRAs differ, and what can happen if a required distribution is missed.
Quick Answer Under the inherited IRA 10-year rule, a designated beneficiary who is not an eligible designated beneficiary must empty the account by the end of the year containing the 10th anniversary of the owner’s death.1 If the owner died on or after the required beginning date, annual distributions are also required in the interim years.2 Surviving spouses, minor children of the owner, disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the owner may qualify for other options.3 A missed required distribution can trigger a 25% excise tax, reduced to 10% if corrected within the correction window.4 |
Who the Inherited IRA 10-Year Rule Applies To
The SECURE Act changed how beneficiaries withdraw from inherited retirement accounts. According to the Treasury Department, the 10-year provisions apply to distributions with respect to account owners who die after December 31, 2019.2 For those deaths, the rules sort beneficiaries into three broad groups.
- Eligible designated beneficiaries. Federal regulations define five main categories: the owner’s surviving spouse; the owner’s child who has not reached the age of majority; a disabled individual; a chronically ill individual; and an individual not more than 10 years younger than the owner.3
- Other designated beneficiaries. Individuals named as beneficiaries who do not fall into one of those categories, such as many adult children and grandchildren, are generally subject to the 10-year rule.1
- Beneficiaries that are not individuals. Different rules can apply when the beneficiary is an estate, a charity, or certain trusts; IRS Publication 590-B addresses those situations, including trusts named as beneficiaries.1
For a minor child of the account owner, the regulations state that an individual reaches the age of majority on the individual’s 21st birthday.3 Once the child reaches that age, the 10-year rule applies, and the 10-year period ends on December 31 of the year containing the 10th anniversary of that date.1
Does the Owner’s Age at Death Change the Rules?
Yes. Whether annual distributions are required during the 10-year window depends on whether the owner died before or after the required beginning date. For owners who reach age 72 after December 31, 2022, required minimum distributions must begin by April 1 of the year following the year they reach age 73.1
- Owner died before the required beginning date. IRS Publication 590-B states that if the 10-year rule applies, no distribution is required for any year before the 10th year.1 The full balance is still due by the end of the 10th year.
- Owner died on or after the required beginning date. The final regulations generally require annual distributions to continue while also requiring full distribution by the end of the calendar year that includes the 10th anniversary of the owner’s death.2
This annual-distribution requirement was the subject of several years of transition relief. For 2024, IRS Notice 2024-35 provided that the IRS would not impose the excise tax on certain missed “specified RMDs” for beneficiaries of owners who died in 2020 through 2023, and it announced that the final regulations would apply for calendar years beginning on or after January 1, 2025.5
How the Rules Compare by Beneficiary Type
Beneficiary situation | Annual distributions during the window? | Deadline or alternative |
Surviving spouse | Depends on the option chosen | May treat the IRA as his or her own, among other options1 |
Minor child of the owner | Life expectancy distributions until age 213 | 10-year rule applies after age 21; account emptied by the end of the year containing the 10th anniversary of that date1 |
Disabled or chronically ill individual; individual not more than 10 years younger than the owner | May take life expectancy distributions1,3 | Eligible designated beneficiary options apply1 |
Other designated beneficiary, owner died before the required beginning date | Not required before the 10th year1 | Full balance by December 31 of the year containing the 10th anniversary of death1 |
Other designated beneficiary, owner died on or after the required beginning date | Yes, generally required2 | Full balance by the end of the year containing the 10th anniversary of death2 |
Other designated beneficiary of a Roth IRA | Not required; treated as though the owner died before the required beginning date6 | Full balance by the end of the 10th year1,6 |
Assumptions: the account owner died after December 31, 2019, and the beneficiary is an individual. Rules for estates, charities, and trusts differ. Eligible designated beneficiary status is determined at the time of the owner’s death.3 This table summarizes general federal rules and does not cover every option or exception.
How Inherited Roth IRAs Differ
Roth IRA owners are not required to take distributions during their lifetime. After the owner’s death, Treasury regulations apply the post-death distribution rules as though the Roth IRA owner died before his or her required beginning date.6 As a result, a non-eligible designated beneficiary of a Roth IRA is not subject to the annual-distribution requirement that applies when an owner dies on or after the required beginning date, but the account must still be emptied by the 10-year deadline.1,6
Distributions from an inherited Roth IRA that are not qualified distributions are taxed under the Roth IRA ordering rules in the regulations, so the account’s history can matter.6
Tax and Penalty Considerations
Distributions from an inherited traditional IRA are generally included in the beneficiary’s taxable income, except for any portion that represents nondeductible contributions.1 Because the 10-year rule sets a deadline rather than a schedule (beyond any required annual amounts), beneficiaries can have some flexibility in deciding how much to withdraw in each year of the window.1,2
That timing can affect more than income tax. For beneficiaries enrolled in Medicare, the Social Security Administration requests modified adjusted gross income information from the IRS for the tax year that is two years prior to the premium year when determining income-related monthly adjustment amounts (IRMAA).7 A large inherited IRA withdrawal in one year can therefore show up in Medicare premiums two years later. Our article How Is IRMAA Calculated for 2026? explains the brackets.
Missing a required distribution carries its own cost. Under the Internal Revenue Code, the excise tax equals 25% of the amount by which the required minimum distribution exceeds the amount actually distributed, and the rate is reduced to 10% if the shortfall is distributed and a return reflecting the tax is filed within the correction window.4
Questions Beneficiaries Can Raise With Their Advisors
- Do I qualify as an eligible designated beneficiary, and if so, which distribution options are available to me?1,3
- Did the owner die before or after the required beginning date, and does that require annual distributions in my situation?1,2
- How might spreading withdrawals across the 10-year window compare with taking larger amounts in fewer years, given my expected income and any Medicare premium considerations?7
- If the account was left to a trust, which rules apply to the trust and its beneficiaries?1
- If I am an IRA owner, do my beneficiary designations still reflect my estate plan?
Frequently Asked Questions
The inherited IRA 10-year rule requires a designated beneficiary who is not an eligible designated beneficiary to withdraw the entire balance of an inherited IRA by December 31 of the year containing the 10th anniversary of the owner's death.1 According to the Treasury Department, it applies with respect to owners who die after December 31, 2019.2
It depends on when the owner died. If the owner died before the required beginning date and the 10-year rule applies, IRS Publication 590-B states that no distribution is required before the 10th year.1 If the owner died on or after the required beginning date, the final regulations generally require annual distributions in addition to emptying the account by the 10-year deadline, for distribution calendar years beginning on or after January 1, 2025.2
Federal regulations list the owner's surviving spouse, the owner's child who has not reached the age of majority (the 21st birthday), a disabled individual, a chronically ill individual, and an individual not more than 10 years younger than the owner. Status is determined at the time of the owner's death.3
Yes. After a Roth IRA owner's death, Treasury regulations apply the post-death distribution rules as though the owner died before the required beginning date.6 A non-eligible designated beneficiary therefore is not subject to the annual-distribution requirement tied to the required beginning date but must still empty the account by the end of the 10th year.1,6
Under Internal Revenue Code section 4974, the excise tax equals 25% of the shortfall between the required minimum distribution and the amount actually distributed. The rate is reduced to 10% if the shortfall is distributed and a return reflecting the tax is filed within the correction window.4
Where This Fits Into a Broader Financial Plan
Inherited IRA decisions sit at the intersection of income tax, Medicare premiums, estate planning, and investment strategy, which is why we approach them as part of a client’s broader financial plan rather than as a single transaction. As an independent, fee-only fiduciary, Moran Wealth Management does not receive commissions or product incentives. We coordinate with each client’s CPA, attorney, and other professionals so that distribution timing and beneficiary designations are considered alongside the rest of the plan. We do not provide legal or tax advice directly. Each professional retains responsibility for their own advice and work, and results can vary based on individual circumstances.
If you have inherited an IRA or want to review how your own accounts will pass to your beneficiaries, schedule a complimentary consultation with our team.
Call 239-920-4440, or email info@moranwm.com.
Sources
[1] Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs), Internal Revenue Service
[2] Required Minimum Distributions (Final Regulations, T.D. 10001), 89 Fed. Reg. 58886, July 19, 2024, Federal Register, via GovInfo
[3] 26 CFR § 1.401(a)(9)-4, Determination of the Designated Beneficiary, Electronic Code of Federal Regulations
[4] 26 U.S. Code § 4974, Excise Tax on Certain Accumulations in Qualified Retirement Plans, Legal Information Institute, Cornell Law School
[5] Notice 2024-35, Certain Required Minimum Distributions for 2024, Internal Revenue Service
[6] 26 CFR § 1.408A-6, Distributions (Roth IRAs), Electronic Code of Federal Regulations
[7] Social Security Handbook § 2504, Description of the Medicare Income-Related Monthly Adjustment Amount Determination Process, Social Security Administration
We do not provide tax or legal advice; please consult your CPA, attorney, or registered tax professional for individualized tax or legal advice.
This communication does contain content generated or assisted by artificial intelligence (AI). While reviewed for accuracy, AI-generated content may not fully reflect all nuances of your individual circumstances. Please consult your advisor directly for personalized guidance.