In 2026, most non-spouse beneficiaries must empty an inherited IRA by December 31 of the tenth anniversary year and pay tax under inherited-IRA rules. A beneficiary IRA is an IRA inherited after the original owner dies, and the deadline, yearly withdrawals, and taxes depend on your relationship to the owner and the IRA type. Spouses and certain close or disabled beneficiaries have different choices. Traditional and Roth accounts are also taxed differently, so the right plan starts with identifying which group you fit.
Table of Contents
- Who uses the 10-year rule?
- Do you need a withdrawal every year?
- What choices does a surviving spouse have?
- How are inherited withdrawals taxed?
- How do you avoid penalties and tax spikes?
Who uses the 10-year rule?
Most non-spouse beneficiaries who inherit from an owner who died after December 31, 2019 must withdraw the entire account by the end of the tenth year. The IRS states this 10-year limit in Publication 590-B, which replaced the old lifetime stretch for this group.
Some beneficiaries qualify for life-expectancy payments instead. The IRS lists these eligible designated beneficiaries as:.
- surviving spouse
- minor child of the owner
- disabled or chronically ill person
- person not more than 10 years younger than the owner
Do you need a withdrawal every year?
Some 10-year beneficiaries must also take a required minimum distribution, or yearly required withdrawal, in years one through nine. This applies when the decedent died on or after the required beginning date, age 73 in 2026, using the Single Life Table, with the balance emptied in year ten.
Enforcement matters in 2026. After penalty relief for missed yearly beneficiary withdrawals for 2021 through 2024, the IRS resumed enforcement for 2025 onward. A beneficiary in the middle of the 10-year window must therefore take the 2026 yearly withdrawal if the yearly rule applies.
What choices does a surviving spouse have?
A surviving spouse has more control than other beneficiaries. The three options are to treat the IRA as her own, roll it into her own IRA or plan, or remain as beneficiary.
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Remaining as beneficiary can delay required withdrawals until the decedent would have reached required distribution age. That delay can help a younger spouse who does not need the funds now. A spouse who needs consolidation or wants her own future schedule may prefer ownership or a rollover.
How are inherited withdrawals taxed?
Distributions from an inherited traditional IRA are generally taxable as ordinary income in the year received. The 10 percent early-withdrawal penalty does not apply to a beneficiary at any age.
Roth treatment turns on the five-year holding period. The IRS explains qualified distributions from an inherited Roth IRA in Retirement Topics – Beneficiary as tax-free when the Roth met that period. Otherwise earnings are taxable while original contributions come out tax-free, and Roth 10-year beneficiaries owe no annual withdrawals.
How do you avoid penalties and tax spikes?
A missed beneficiary required withdrawal faces a 25 percent excise tax on the shortfall, reduced to 10 percent if corrected within two years. The IRS describes these distribution rules at required minimum distributions for IRA beneficiaries, so check whether a yearly amount applies to you.
Take each required amount by December 31. Spread other 10-year withdrawals across years rather than taking one lump sum in year ten, which can push income into a higher bracket.
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