Why this is so confusing

The SECURE Act of 2019 killed the "stretch IRA", the old rule that let beneficiaries stretch distributions over their lifetime. Most non-spouse beneficiaries now have to empty the account within 10 years. Then the IRS spent four years arguing about whether annual distributions were also required inside that window, before finalizing the rule in July 2024: yes, in many cases.

Penalty relief for the confusion years (2021–2024) has ended. Missed RMDs from the 2025 tax year onward face the full excise tax. That's why getting this right now matters.

The five questions

Question 1 What was your relationship to the original owner?

Spouse, or non-spouse? Spouses get options nobody else gets, including rolling the account into their own IRA. Everything below assumes non-spouse unless stated otherwise.

Question 2 When did the original owner die, before or after January 1, 2020?

Deaths before 2020 generally follow the old rules (life-expectancy stretch). Deaths on or after January 1, 2020 fall under the SECURE Act's 10-year framework.

Question 3 Had the owner started taking RMDs?

That means: had they reached their required beginning date (generally April 1 of the year after turning 73, or 72/70½ under older brackets)? This is the single most-missed detail. If yes, most non-spouse beneficiaries owe annual RMDs in years 1–9 on top of emptying the account by year 10. If no, there's no annual requirement, but the 10-year deadline still applies.

Question 4 Are you an "eligible designated beneficiary"?

Five categories qualify: (1) surviving spouse, (2) the owner's minor child (not grandchild), (3) a disabled individual, (4) a chronically ill individual, (5) someone not more than 10 years younger than the owner. EDBs can generally still use the life-expectancy method instead of the 10-year rule. Note: a minor child's EDB status ends at the age of majority, then the 10-year clock starts.

Question 5 Traditional or Roth?

Both follow the same timing rules when inherited. The difference is tax: traditional IRA distributions are taxed as ordinary income; qualified Roth distributions are generally tax-free, but the account still has to be emptied on schedule.

Your six possible outcomes

A. 10-year rule + annual RMDs Non-spouse, non-EDB · died 2020+ · owner had started RMDs. Take annual RMDs in years 1–9 (Single Life Table, factor minus 1 each year) and empty the account by Dec 31 of year 10. This is the regime most people miss.
B. 10-year rule, no annual RMDs Non-spouse, non-EDB · died 2020+ · owner had not started RMDs. No annual requirement, but the full balance must be out by Dec 31 of year 10. Consider spreading withdrawals to avoid a bracket spike in year 10.
C. Life-expectancy stretch Eligible designated beneficiary, or death before 2020. Annual RMDs based on your life expectancy (Single Life Table), factor reduced by one each year. No 10-year deadline.
D. 5-year rule Non-designated beneficiary (estate, charity, some trusts) · owner died before their required beginning date. Entire balance out by Dec 31 of year 5.
E. Spousal options Surviving spouse. Three paths: roll into your own IRA (delays RMDs until your own start age), remain as beneficiary (delays until the deceased would have reached RMD age), or treat as your own. The right choice depends on your age relative to 59½ and the deceased's RMD status, this is a CPA conversation.
F. Successor beneficiary You inherited an inherited IRA. You generally continue the original beneficiary's schedule, the 10-year clock does not reset. (Narrow exception: succeeding an eligible designated beneficiary who was taking life-expectancy payments can create a new 10-year period from their death, get professional guidance.)

Watch out for these

  • The year-10 balloon. Taking only the minimum for 9 years leaves a massive distribution in year 10, often pushing you into a higher bracket. Many beneficiaries do better with roughly equal withdrawals (⅒, ⅑, ⅛…) across the window.
  • The wrong table. Inherited IRAs use the Single Life Table, not the Uniform Lifetime Table you'd use for your own IRA. Mixing them up is one of the most common errors.
  • Multiple beneficiaries, one account. If separate inherited IRAs aren't established by Dec 31 of the year after death, distributions may be based on the oldest beneficiary's life expectancy.
  • Roth ≠ exempt from timing. Inherited Roth IRAs follow the same 10-year schedule, the money just isn't taxed on the way out (if qualified).
  • The year-of-death RMD. If the owner died after their required beginning date but hadn't taken that year's RMD, the beneficiary must take it by Dec 31 of the year of death.
The penalty, in plain English. Miss a required distribution and the excise tax is 25% of the shortfall, reduced to 10% if you correct it within two years. On a $500,000 inherited IRA with a missed $20,000 RMD, that's $5,000 (or $2,000 corrected). The IRS may waive it for reasonable cause, but that's discretionary, don't count on it.

What to bring to your CPA

  1. Which outcome (A–F) from this guide applies to me, and do you agree?
  2. What is my exact RMD amount for this year, and which table did you use?
  3. Should I take more than the minimum to smooth my tax brackets across the window?
  4. Will these distributions affect my Medicare premiums (IRMAA) or Social Security taxation?
  5. Am I eligible for any relief if I missed distributions in prior years?
Get my exact numbers: open the calculator
Disclaimer. This guide is for education only, not tax, legal, or financial advice. Inherited IRA rules are fact-specific and changed significantly under the SECURE Act, SECURE 2.0, and IRS final regulations (TD 10001, July 2024). Verify everything with a qualified tax professional. IRS Publication 590-B is the authoritative source.