An inherited IRA is an account you receive after the owner's death, and a required minimum distribution (RMD) is the withdrawal tax law requires each year. If that owner was already taking RMDs, most non-spouse beneficiaries must take yearly RMDs and empty the account by December 31 of year 10. According to the Internal Revenue Service, most non-spouse beneficiaries who inherit from an owner who died on or after January 1, 2020 must fully distribute the account by December 31 of the 10th year after death beneficiary distribution rules. You cannot skip to a single payment in year 10 when annual payments apply.
Table of Contents
- Why the start date controls your schedule
- Settle the death-year withdrawal first
- How do you figure each yearly amount?
- Do spouses use a different rule?
- What does a missed withdrawal cost?
Why the start date controls your schedule
The Internal Revenue Service explains in its summary of the final SECURE Act regulations that an heir faces annual RMDs when the owner had reached the required beginning date, currently age 73. That heir must take annual RMDs in years 1-9 and then empty the remainder in year 10. Fidelity notes the opposite case. If the owner died before the required beginning date, the same 10-year heir generally has no yearly RMD.
The heir must only ensure the balance is zero by the 10-year deadline. Timing follows the death year. If the owner died in 2025, years 1-9 are 2026 through 2034. Year 10 ends December 31, 2035.
Settle the death-year withdrawal first
Fidelity notes that any part of the year-of-death RMD not taken before death remains due. The beneficiary must withdraw that remainder by December 31 of the death year.
It does not roll into the 10-year schedule. This step prevents an early shortfall. It also sets a clean starting balance for later calculations.
- Ask the custodian whether the owner took the full RMD before death.
- Confirm the remaining dollar amount for that year.
- Take that remainder first, before planning years 1-9.
How do you figure each yearly amount?
The Internal Revenue Service shows in its IRA required minimum distribution worksheet guidance that each annual inherited-IRA RMD equals the prior December 31 balance divided by a life-expectancy factor. The factor comes from Table I in Publication 590-B, the Single Life Expectancy Table.
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Use the balance and factor for that specific year. For example, a $120,000 prior-year-end balance divided by a factor of 15 gives an $8,000 RMD for the current year. Repeat the math each year because the balance and factor change.
- Record the account balance on December 31 of the prior year.
- Find your factor in Table I for your age that year.
- Divide the balance by the factor and withdraw at least that amount.
Do spouses use a different rule?
Vanguard explains that a surviving spouse has separate options. The spouse may treat the IRA as their own or roll it into their own IRA. That path defers RMDs until the spouse reaches RMD age.
This choice does not extend to most children, siblings, or friends. A non-spouse beneficiary stays on the 10-year track described above. Check beneficiary status before assuming the spouse rule applies.
What does a missed withdrawal cost?
Greenback Expat Tax Services notes in its updated summary of the final regulations that the IRS waived penalties for missed annual beneficiary RMDs for 2021-2024, but annual RMDs became fully enforceable beginning in 2025. A missed RMD faces a 25% excise tax on the shortfall, reducible to 10% if corrected within two years and reported on Form 5329.
Traditional-IRA distributions are generally taxable as ordinary income. Spread withdrawals across the 10-year window instead of bunching them late. Check each year's taxable amount before December and keep proof of timely correction.
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