Inherited IRA RMD: Rules for Beneficiaries

The SECURE Act of 2019 replaced the lifetime "stretch" IRA with a 10-year distribution deadline for most non-spouse beneficiaries who inherit after December 31, 2019. The IRS then spent three years issuing conflicting guidance on whether annual distributions are required within that 10-year window — waiving penalties via Notices 2022-53, 2023-54, and 2024-35 while it sorted out the rules. Final regulations published in July 2024 [VERIFY: Confirm TD 10001, 89 FR 58896] settled the question: if the original owner died on or after their Required Beginning Date, annual RMDs are mandatory within the 10-year window, enforceable starting with the 2025 distribution year.

What the SECURE Act Changed

The SECURE Act eliminated the lifetime stretch IRA for most non-spouse beneficiaries. Before 2020, inheriting an IRA meant you could spread required distributions over your own life expectancy — potentially 40+ years of tax-deferred growth. A 40-year-old inheriting a $500,000 Traditional IRA had a first-year RMD under $11,000, with the rest compounding untouched. The SECURE Act (Public Law 116-94, signed December 20, 2019) replaced this with a hard 10-year deadline: non-spouse beneficiaries who don't qualify as "eligible designated beneficiaries" must withdraw the entire inherited account by December 31 of the 10th calendar year following the year of death.

The tax acceleration is measurable. That same 40-year-old now has 10 years to withdraw $500,000, not 45. At $50,000/year of other income, adding $50,000 in annual inherited IRA distributions pushes taxable income from the 12% bracket into the 22% bracket. Under the old stretch rules, distributions under $11,000 stayed entirely in the 10% or 12% bracket. Over 10 years, the difference in federal tax alone can exceed $30,000 — before state taxes.

The 10-Year Rule Has Two Versions

The 10-year rule operates differently depending on a single fact: whether the original IRA owner died before or on/after their Required Beginning Date (RBD). The RBD is April 1 of the year after the owner reaches their RMD age — 73 for those born 1951–1959, or 75 for those born 1960 or later (per SECURE 2.0 §107). This one distinction — before or after the RBD — determines whether you have full flexibility or an annual obligation.

Owner died before the RBD: No annual minimum distributions are required. You can take money out whenever you want — or take nothing at all — for 10 years. The only hard deadline is December 31 of the 10th year after death, when the remaining balance must be fully distributed. This gives you complete control over timing and tax bracket management.

Owner died on or after the RBD: Annual RMDs are required in years 1 through 9, calculated using the Single Life Expectancy Table (Table I in IRS Publication 590-B, Appendix B). The entire remaining balance must still be distributed by the end of year 10. You can always take more than the minimum, but you cannot take less without triggering the excise tax.

Beneficiary Type	Owner Died Before RBD	Owner Died On/After RBD
Non-spouse, non-EDB	10-year deadline only — no annual RMDs	10-year deadline + annual RMDs in years 1–9
Surviving spouse	Life expectancy stretch or 10-year election	Life expectancy stretch (Table I)
Minor child of decedent	Stretch until age 21, then 10-year clock starts	Stretch until age 21, then 10-year clock starts
Disabled or chronically ill	Life expectancy stretch	Life expectancy stretch
≤10 years younger than decedent	Life expectancy stretch	Life expectancy stretch
Non-designated beneficiary (estate, charity)	5-year rule: empty by end of year 5	Decedent's remaining life expectancy

Three Years of IRS Confusion

The annual RMD requirement within the 10-year window was not in the SECURE Act's statutory text — at least not explicitly. It emerged from IRS proposed regulations published in February 2022 (87 FR 10504), which interpreted the interaction between the new 10-year rule and the pre-existing "at least as rapidly" rule in IRC §401(a)(9)(B)(i). When the original owner died after the RBD, the IRS reasoned, the beneficiary's distributions must continue at least as rapidly as the owner's — meaning annual distributions, not a decade of deferral.

The retirement planning community had largely assumed the 10-year rule meant a simple 10-year deadline with no annual obligation. The proposed regulations upended that assumption, and the IRS acknowledged the confusion with three successive penalty waivers:

• February 2022: IRS publishes proposed regulations (87 FR 10504) introducing annual RMDs within the 10-year window for post-RBD deaths
• October 2022: IRS Notice 2022-53 waives the excise tax for missed 2021 and 2022 annual RMDs
• July 2023: IRS Notice 2023-54 extends the waiver through 2023
• April 2024: IRS Notice 2024-35 extends the waiver through 2024
• July 2024: IRS publishes final regulations confirming annual RMDs are required when the owner died on or after the RBD, effective for distribution calendar years beginning January 1, 2025 [VERIFY: Confirm TD 10001 final regulations publication date and effective date]

Who Still Gets the Stretch: Eligible Designated Beneficiaries

Five categories of beneficiaries bypass the 10-year rule entirely and can still stretch distributions over their life expectancy. These "eligible designated beneficiaries" (EDBs), defined in IRC §401(a)(9)(E)(ii), are:

1. Surviving spouse of the deceased owner
2. Minor children of the deceased owner (only the decedent's own children — not grandchildren or stepchildren)
3. Disabled individuals meeting the definition in IRC §72(m)(7)
4. Chronically ill individuals per IRC §7702B(c)(2)
5. Individuals not more than 10 years younger than the deceased owner (a sibling, for instance)

EDBs calculate annual RMDs using the Single Life Expectancy Table based on their age, with the factor reducing by 1 each year. Surviving spouses get additional options: they can roll the inherited IRA into their own IRA (resetting all RMD rules to their own timeline) or elect to be treated as the account owner under SECURE 2.0 §327.

Minor children lose their EDB status when they reach age 21 — the SECURE Act's federal definition of majority, regardless of state law. At that point, the 10-year clock starts. A child who inherits at age 8 stretches distributions until 21, then must empty the account by 31. For details on how RMDs work across different account types, see our RMD calculator guide.

Inherited Roth IRAs: Same Deadline, No Tax Bill

Non-spouse beneficiaries of inherited Roth IRAs face the same 10-year distribution deadline — but two structural advantages make Roth IRAs the single best retirement asset to inherit.

First, qualified distributions are federal-income-tax-free. The original owner must have held any Roth IRA for at least five tax years (the clock starts January 1 of the year of the first contribution or conversion). If that five-year period was satisfied before death, every dollar the beneficiary withdraws is tax-free.

Second — and this is the detail most guides miss — Roth IRA owners are never subject to lifetime RMDs (IRC §408A(c)(5)). A Roth owner is always treated as dying before the Required Beginning Date. The consequence: no annual RMDs are required within the 10-year window, regardless of the owner's age at death. A 90-year-old Roth owner's inherited account gets the same treatment as a 50-year-old's. The beneficiary can let the entire balance grow tax-free for the full 10 years and withdraw it all at the deadline.

Feature	Inherited Traditional IRA	Inherited Roth IRA
10-year rule applies (non-EDB)	Yes	Yes
Annual RMDs within 10-year window	Yes, if owner died on/after RBD	Never — Roth owners have no RBD
Distributions taxed as	Ordinary income	Tax-free (if 5-year rule met)
Optimal non-spouse strategy	Spread distributions to manage tax brackets	Delay to maximize tax-free compounding
Spouse rollover option	Roll to own Traditional IRA	Roll to own Roth IRA (eliminates all future RMDs)

How to Calculate Inherited IRA RMDs

When annual distributions are required (original owner died on or after the RBD, beneficiary is subject to the 10-year rule), the calculation uses the Single Life Expectancy Table in IRS Publication 590-B, Appendix B, Table I. The beneficiary looks up their age in the year after the owner's death, finds the corresponding life expectancy factor, divides the prior year-end account balance by that factor, and reduces the factor by 1 each subsequent year.

Worked Example

Sarah (age 50 in 2024) inherits a $500,000 Traditional IRA from her father, who died in 2023 at age 78 — past his Required Beginning Date.

Step 1: Determine the initial life expectancy factor. Sarah's age in the first distribution year (2024, the year after death): 50. The Table I factor for age 50 is 36.2. [VERIFY: Confirm exact Table I factor for age 50 from current IRS Publication 590-B, Appendix B]

Step 2: Calculate annual RMDs. The factor decreases by 1 each year.

Year	Life Expectancy Factor	Account Balance (Dec 31 prior year)	Required Distribution	Effective Rate
2024	36.2	$500,000	$13,812	2.8% — penalty waived
2025	35.2	$510,650	$14,507	2.8%
2026	34.2	$521,050	$15,235	2.9%
2027	33.2	$531,060	$15,996	3.0%
2028	32.2	$540,520	$16,787	3.1%
2033	—	Remaining balance	Entire remaining balance	100%

Balances assume 5% annual growth after each year's distribution, for illustration. The 2024 penalty was waived per IRS Notice 2024-35; this example assumes Sarah took the distribution anyway to manage her tax burden.

The annual minimums are modest — roughly 2.8% to 3.1% of the account. The real tax problem is year 10. If Sarah takes only the minimum each year, her remaining balance could exceed $400,000. At $50,000 of other income, distributing $400,000 in a single year pushes her marginal federal rate to 35%.

A better approach: distribute $55,000–$65,000 annually across all 10 years, staying within the 22% or 24% bracket. The total federal tax is lower, even though she pays tax sooner, because she avoids the massive year-10 spike. This is exactly the kind of bracket distortion that most retirement calculators get wrong — they don't model the impact of uneven inherited IRA distributions on your marginal rate. CoastIQ's RMD Projection tool models these distribution schedules year by year, showing the after-tax cost of each strategy across the full 10-year window.

Planning Your Distribution Strategy

The 10-year inherited IRA window interacts with your broader tax picture in ways that reward deliberate planning. If you're running a Roth conversion ladder from your own Traditional IRA, inherited IRA distributions add to your ordinary income and may push conversions into higher brackets. Modeling both income streams against the same bracket schedule is essential.

Three principles for distribution timing:

1. Front-load during low-income years. Between jobs, on sabbatical, or before claiming Social Security? Take larger distributions while other income is minimal. A year with $20,000 of income is a year where $40,000 of inherited IRA distributions stays in the 12% bracket.
2. Spread evenly if income is stable. Smoothing distributions across 10 years almost always beats minimum-then-lump-sum. Consistent bracket utilization outperforms one massive spike.
3. Back-load inherited Roth distributions. Roth withdrawals are tax-free, so there's no bracket penalty for delay. Let the Roth compound. Take Traditional inherited IRA distributions first.

Frequently Asked Questions

How do I calculate the RMD on an inherited IRA?

For most non-spouse beneficiaries who inherited after 2019, there is no annual RMD formula — the SECURE Act requires the entire account to be emptied by December 31 of the 10th year after the original owner's death. If the original owner had already begun RMDs (reached their Required Beginning Date, generally age 73 or 75 depending on birth year), IRS final regulations require annual distributions within the 10-year window, calculated using the Single Life Expectancy Table (Table I in IRS Publication 590-B). Penalties for missed annual RMDs were waived through 2024 via IRS Notices 2022-53, 2023-54, and 2024-35, but apply starting in 2025.

What is the RMD table for inherited IRAs?

Eligible designated beneficiaries — surviving spouses, minor children of the decedent, disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the decedent — use the Single Life Expectancy Table (Table I) in IRS Publication 590-B, Appendix B. The factor is based on the beneficiary's age in the year after the owner's death and decreases by 1 each subsequent year. Non-eligible designated beneficiaries subject to the 10-year rule do not use a life expectancy table unless the owner died on or after their Required Beginning Date, in which case annual RMDs are calculated using the same Table I.

What are the RMD rules for a non-spouse beneficiary?

Non-spouse beneficiaries who inherited after December 31, 2019, must empty the inherited IRA by December 31 of the 10th year following the year of death. If the original owner died on or after their Required Beginning Date (generally age 73+), the beneficiary must also take annual minimum distributions during years 1 through 9, calculated using the Single Life Expectancy Table. There is no option to stretch distributions over the beneficiary's lifetime — the SECURE Act eliminated that for all non-spouse beneficiaries except those who qualify as eligible designated beneficiaries.

Do inherited Roth IRAs have RMDs?

Yes, inherited Roth IRAs are subject to the same 10-year distribution deadline for non-spouse beneficiaries. The key difference: Roth IRA owners are never subject to lifetime RMDs under IRC §408A(c)(5), so they always count as dying before their Required Beginning Date. No annual distributions are required within the 10-year window — the beneficiary can let the Roth grow tax-free for the full 10 years and withdraw the entire balance tax-free at the deadline (assuming the original owner's 5-year holding period was met). Spouse beneficiaries can roll an inherited Roth into their own Roth IRA, eliminating all distribution requirements entirely.

What is the deadline for inherited IRA RMDs?

Under the 10-year rule, the final deadline is December 31 of the 10th calendar year following the calendar year of the original owner's death. If annual RMDs are required (because the owner died on or after their Required Beginning Date), each annual distribution is due by December 31 of that year. There is no April 1 extension for inherited IRAs — that grace period only applies to the original owner's first lifetime RMD. Missing an annual RMD triggers a 25% excise tax on the shortfall, reducible to 10% if corrected within two years.