Inherited IRA 10-Year Rule 2026: RMDs Now Enforced
The inherited IRA 10-year rule is fully enforced in 2026. Who owes annual RMDs in years 1-9, who keeps the lifetime stretch, and the 25% missed-RMD penalty.
This article is for educational purposes only and is not tax, legal, or financial advice. Tax rules change periodically, always check current IRS guidance or consult a qualified tax professional.
If you inherited an IRA and read somewhere that you can leave it alone until year 10, check the date on that article. For a large share of beneficiaries, that advice stopped being true in 2025.
The IRS spent four years waiving the penalty on missed beneficiary withdrawals while it finished writing the rules. Those waivers are gone. 2026 is the second year of full enforcement, which means a beneficiary who followed the old advice may now have two missed distributions stacked up.
Below is how to tell which group you fall in, when your clock actually runs out, and what a skipped year costs. Then the part almost nobody plans for: what these withdrawals do to your tax bill.
The 10-Year Rule in One Paragraph (and What Changed in 2026)
The SECURE Act of 2019 ended the stretch IRA for most non-spouse beneficiaries. If the original owner died after December 31, 2019, you generally have to empty the inherited account by December 31 of the 10th year following the year of death. No more spreading distributions across your own lifetime.
What stayed unsettled for years was whether you also had to take something out in the meantime. The IRS answered that with final regulations published July 19, 2024, effective for calendar years beginning on or after January 1, 2025.
It depends on when the original owner died relative to their own required beginning date. That one fact sorts every beneficiary into one of two groups, and it decides whether you owe money to the IRS this December.
Do You Owe an Annual RMD? The Required Beginning Date Test
Your required beginning date (RBD) is April 1 of the year after you turn 73, under the SECURE 2.0 Act. For anyone born in 1960 or later, the trigger age is 75. It is the deadline for an account owner’s own first RMD, and every inherited IRA question below turns on it.
| If the owner died… | Annual RMDs in years 1-9? | Empty by year 10? |
|---|---|---|
| Before their required beginning date | No | Yes |
| On or after their required beginning date | Yes, based on your single life expectancy | Yes |
The logic behind the second row is the “at least as rapidly” rule. Once the owner started drawing the account down, the IRS does not let the payments stop just because the owner died. You pick up the schedule.
A few details trip people up:
- Roth IRA owners are always treated as dying before their RBD. Roth owners never had lifetime RMDs, so there is nothing to continue. An inherited Roth IRA runs on the 10-year clock with no annual withdrawals required in years 1 through 9.
- The year-of-death RMD is still owed. If the owner had reached their RBD and had not taken their full RMD for the year they died, the beneficiary has to take that amount.
- A missed annual RMD does not reset the year-10 deadline. The two obligations are separate. Satisfying one does not excuse the other.
For the general mechanics of how RMDs work while the owner is still alive, see our 2026 required minimum distribution guide.
Who Is Exempt: Eligible Designated Beneficiaries
Five categories of beneficiary escape the 10-year rule and can generally still stretch distributions over their own life expectancy. The IRS calls them eligible designated beneficiaries (EDBs):
- The surviving spouse of the owner
- The owner’s minor child (until age 21)
- A disabled individual, as defined in the tax code
- A chronically ill individual
- Anyone not more than 10 years younger than the owner, including anyone older
Most of the mistakes come down to two traps.
Grandchildren are not EDBs. The minor-child exception covers the owner’s own children only. A grandchild who inherits from a grandparent is a plain designated beneficiary on the 10-year clock, regardless of age.
Age 21 is a federal cutoff, not a state one. The minor-child exemption ends at 21 no matter what your state’s age of majority is, and no matter whether the child is still in school. When it ends, the 10-year clock starts, so the account has to be empty by December 31 of the year that child turns 31.
Surviving spouses get options nobody else has. A spouse can roll the account into their own IRA and treat it as theirs, or stay a beneficiary of the inherited account. Staying a beneficiary keeps distributions free of the 10% early-withdrawal tax before age 59½, which matters for a younger widow or widower who needs the money now.
One more category: if the beneficiary is not a person at all (an estate, a charity, or a trust that does not qualify as a see-through trust), the designated beneficiary rules do not apply. Those accounts run on a separate schedule: a five-year payout if the owner died before their required beginning date, or annual distributions over the owner’s own remaining life expectancy if they died on or after it.
Calculating Your Annual RMD and Finding Your Year-10 Deadline
If you landed in the “annual RMD required” row, the math uses the Single Life Expectancy Table (Table I in IRS Publication 590-B), not the Uniform Lifetime Table that account owners use.
You look up your factor once, in your first distribution year, based on your age that year. After that you subtract 1.0 each year instead of looking it up again.
Annual RMD = Prior-year-end balance ÷ Single Life factor
Worked example. Your father died in 2025 at 78, well past his RBD, and left you a $400,000 traditional IRA. You turn 55 in 2026, your first distribution year. The Single Life factor at age 55 is 31.6.
- 2026 RMD: $400,000 ÷ 31.6 = $12,658.23
- 2027 factor: 30.6
- 2028 factor: 29.6, and so on
Notice how small that is against a $400,000 balance. Nine years of minimum withdrawals will not come close to clearing the account, so the final year has to absorb whatever is left. More on why that matters in a moment.
Our RMD calculator handles the arithmetic if you would rather not do it by hand.
Find your final deadline
The account has to be at zero by December 31 of the year containing the 10th anniversary of the owner’s death.
| Owner died in | Account must be empty by |
|---|---|
| 2020 | December 31, 2030 |
| 2021 | December 31, 2031 |
| 2022 | December 31, 2032 |
| 2023 | December 31, 2033 |
| 2024 | December 31, 2034 |
| 2025 | December 31, 2035 |
| 2026 | December 31, 2036 |
The 25% Penalty and the Two-Year Fix
Miss a required distribution and the IRS charges an excise tax of 25% of the shortfall. That is the amount you should have taken and didn’t, not the whole account.
The number drops to 10% if you correct the miss inside the correction window, which runs through the end of the second tax year after the year you missed. You report the shortfall on Form 5329 and, if you have a good reason, attach a request for a waiver based on reasonable cause. The IRS has historically been receptive when the miss was genuine and promptly fixed.
If you skipped 2025
2025 was the first enforced year, so this comes up constantly right now. What to do:
- Take the missed 2025 amount out of the account as soon as you can.
- Take your 2026 RMD by December 31, 2026. It is a separate obligation.
- File Form 5329 for 2025 reporting the shortfall, with a waiver request if reasonable cause applies.
Because 2025 sits inside the correction window during 2026, the excise tax on that shortfall can fall to 10% or be waived outright.
Watch the timing on the income side. A distribution is taxed in the year you actually receive it, not the year it was owed. Catching up on 2025 during 2026 means both amounts hit your 2026 return, which can push you into a higher bracket and, if you are not careful, trigger an underpayment penalty on top of everything else.
The Tax Bill Nobody Plans For: Stacking Distributions on Wage Income
Everything above is compliance. This part is where the actual money is.
Every dollar you pull from an inherited traditional IRA is ordinary income, taxed at your marginal rate, stacked on top of your salary. No capital gains treatment. No 10% early-withdrawal penalty either, regardless of your age, which is one of the few breaks beneficiaries get.
So “how much do I take this year” is a bracket question long before it is a paperwork question.
The lump-sum trap, with real 2026 numbers
Say you and your spouse file jointly with $190,000 in wages. After the $32,200 standard deduction, your taxable income is $157,800, comfortably inside the 22% bracket, which runs to $211,400 for joint filers in 2026.
You inherit a $300,000 traditional IRA from an owner who died before their RBD, so no annual RMDs are required. Two ways to play it (holding rates and wages flat, ignoring growth, to keep the comparison clean):
Plan A: $30,000 a year for 10 years. Each year your taxable income becomes $187,800, still under the $211,400 ceiling. The whole $300,000 gets taxed at 22%. Extra federal tax: $66,000.
Plan B: nothing until year 10, then $300,000 at once. Taxable income that year jumps to $457,800:
- 22% on $53,600 (the room left in the bracket) = $11,792
- 24% on $192,150 = $46,116
- 32% on $54,250 = $17,360
Extra federal tax: $75,268.
Same withdrawal, same account, $9,268 more for waiting. And that is before the knock-on effects. Check the full 2026 bracket tables to see where your own ceiling sits.
The second-order damage
A single huge income year does more than move your bracket:
- Net investment income tax. The distribution itself isn’t net investment income, but it raises your MAGI. Cross $250,000 (joint) or $200,000 (single) and your interest, dividends, and capital gains pick up an extra 3.8%. Our NIIT calculator shows the threshold effect.
- Medicare IRMAA. Premiums use a two-year lookback, so a spike in 2026 raises your Part B and Part D premiums in 2028.
- ACA premium credits. Higher income can shrink or wipe out a marketplace subsidy, sometimes with a repayment at filing.
- Social Security taxability. More provisional income means a larger share of your benefits becomes taxable.
One thing this is not
Income tax on distributions is separate from estate tax. Federal estate tax, if any, is settled by the estate before you receive anything. What lands on your return is income tax on the money you withdraw.
Roth inherited accounts
An inherited Roth IRA still has to be emptied within 10 years, but the distributions are generally tax-free once the account has been open at least five years. There are no annual RMDs during years 1 through 9. If you hold both types, drain the traditional account first and let the Roth compound tax-free to the deadline. The Roth vs. traditional comparison covers the underlying difference.
Model it before you withdraw
The right withdrawal size depends on how much headroom is left in your bracket after wages, and that number changes every year. Tax47 is built for exactly this kind of question: add your W-2, enter the inherited distribution as other income, and watch the estimated refund or amount owed move as you change the withdrawal amount. The year comparison view puts a level plan next to a year-10 lump sum.
Everything runs on your device, with no account required. You can also work through it with the tax bracket calculator, the effective tax rate calculator, or the refund estimator, or download the app and keep the numbers with you.
Sources & References
- IRS Publication 590-B, Distributions from IRAs — Single Life Expectancy Table, eligible designated beneficiary definitions, and the year-10 deadline.
- IRS — Retirement plan and IRA RMD FAQs — Required beginning date, the 25%/10% excise tax, and Form 5329 reporting.
- Federal Register — Required Minimum Distributions final regulations (July 19, 2024) — The rules that took effect for calendar years beginning on or after January 1, 2025.
- eCFR 26 CFR §1.401(a)(9)-5 — Codified mechanics of the 10-year rule and annual distributions.
- eCFR 26 CFR §1.401(a)(9)-4 — Designated and eligible designated beneficiary definitions.
- IRS — Required minimum distributions for IRA beneficiaries — Beneficiary payout schedules.
- IRS Notice 2024-35 — The final year of beneficiary RMD penalty relief.
- IRS — About Form 5329 — Where the shortfall and waiver request are reported.
- IRS Topic no. 557 — Inherited IRA distributions are exempt from the 10% additional tax.
- SECURE 2.0 Act (P.L. 117-328, Division T) — RMD ages 73 and 75, and the penalty cut from 50% to 25%/10%.
- IRS Revenue Procedure 2025-32 inflation adjustments — 2026 brackets and standard deduction amounts used in the examples.
This article is for educational purposes only and is not tax, legal, or financial advice. Tax rules change periodically, always check current IRS guidance or consult a qualified tax professional.
Frequently Asked Questions
Do I have to take money out of an inherited IRA every year?
Only if the original owner had already reached their required beginning date when they died. If they had, you owe an annual RMD in years 1 through 9 and must empty the account by year 10. If they died before their required beginning date, you can take nothing until year 10, but you still must empty it by then.
When exactly does my 10 years end?
December 31 of the year containing the 10th anniversary of the owner's death. Inherit in 2025 and the account must be at zero by December 31, 2035.
Who is exempt from the 10-year rule?
Eligible designated beneficiaries: a surviving spouse, the owner's minor child (until age 21), a disabled individual, a chronically ill individual, and anyone not more than 10 years younger than the owner. They can generally stretch distributions over their own life expectancy.
What is the penalty if I miss an inherited IRA RMD?
A 25% excise tax on the amount you should have withdrawn, reduced to 10% if you take the missed amount and correct it within the two-year correction window. You report it on Form 5329 and can request a waiver for reasonable cause.
I didn't take a distribution in 2025. What do I do now?
Take the missed amount immediately, then file Form 5329 for the year you missed. Because 2025 is still inside the correction window during 2026, the penalty can drop to 10%, or be waived entirely if the IRS accepts reasonable cause.
Are inherited IRA withdrawals taxed?
Distributions from an inherited traditional IRA are ordinary income taxed at your marginal rate, on top of your wages. There is no 10% early-withdrawal penalty no matter your age. Distributions from an inherited Roth IRA are generally tax-free if the account was open at least five years.
Does the 10-year rule apply to inherited Roth IRAs?
Yes. The account still has to be emptied within 10 years. But because a Roth owner is always treated as dying before the required beginning date, there are no annual RMDs during years 1 through 9.
Should I spread withdrawals out or wait until year 10?
Spreading them usually costs less. A single year-10 lump sum lands entirely on top of that year's wages and can push you into the 24% bracket or higher, while roughly level withdrawals can keep the whole balance taxed at 22%. Model both before you decide.