The inherited IRA 10-year rule: a decade-long countdown with a few trap doors

By Tom, CPA · Updated October 25, 2026

TL;DR: Most non-spouse beneficiaries who inherit an IRA from someone who died after 2019 must empty it by December 31 of the year containing the 10th anniversary of the death. Eligible designated beneficiaries (spouse, minor child, disabled or chronically ill person, or someone not more than 10 years younger) have more options. If the owner had already started RMDs, annual distributions are generally also required in years 1–9.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

Inheriting an IRA is bittersweet: someone you cared about is gone, and they left you a tax puzzle. Since the SECURE Act, the puzzle has a deadline. For most adult children and other non-spouse heirs, the old "stretch" over your own lifetime is gone, replaced by a 10-year rule that can concentrate taxable income into a decade.

The good news is that a decade is long enough to plan. Spread distributions well and the tax hit can be manageable; leave it all to year ten and it can be a tax-bracket cannonball. Let's cover who's affected, what's required, and how early retirees in particular can use the rules.

CPA Warning Label: The 10-year deadline is the easy part. The trap is the annual RMDs that apply in years 1–9 when the original owner had reached their required beginning date. Missing them triggers a 25% excise tax.

Who gets the 10-year rule

Publication 590-B sorts beneficiaries into groups:

A minor child of the owner uses life expectancy until reaching the age of majority, then the 10-year clock starts. The IRS says the account must be emptied by December 31 of the year containing the 10th anniversary of reaching majority.

The deadline

Under the 10-year rule, the beneficiary must withdraw the entire balance by December 31 of the year containing the 10th anniversary of the owner's death. The IRS example: owner died in 2025, so the account must be empty by December 31, 2035.

Annual RMDs: depends on when the owner died

• Owner died before their required beginning date (generally April 1 after the year they turned 73): Publication 590-B says no distribution is required for any year before the 10th year. You can take money whenever you like, as long as it's all out by the deadline.
• Owner died on or after their required beginning date: under the final regulations, the beneficiary generally must take annual RMDs in years 1 through 9 based on life expectancy, and empty the account in year 10.

The IRS waived penalties for missed annual RMDs of this type for several years while the regulations were finalized (Notice 2024-35 covered 2024). As of October 2026, those waivers have ended and annual distributions are expected. The excise tax for a missed RMD is 25%, reduced to 10% if corrected within the correction window.

Roth IRAs inherited

An inherited Roth IRA is also subject to the 10-year rule for non-eligible beneficiaries. But because Roth owners have no lifetime RMDs, the owner is always treated as dying before the required beginning date, so annual RMDs in years 1–9 generally don't apply. Many beneficiaries leave an inherited Roth to grow as long as possible and withdraw it in year 10. Distributions are tax-free if the original owner's five-year period was met.

Illustration: smoothing the tax

Illustration (assumptions): Larry, 52, inherits a $500,000 traditional IRA from his father, who died in 2026 at 80 (after his required beginning date). Larry is an adult child, so the 10-year rule plus annual RMDs applies. He retires early in 2027.

• Option A, minimum plus balloon: take only the annual RMDs (small at first), then a huge distribution in year 10. That could push hundreds of thousands into one tax year.
• Option B, even spreading: withdraw roughly one tenth of the balance (about $50,000 plus growth) each year, which keeps income level and may fit within a lower bracket in his early-retirement years.

Since he's retired with little other income, Option B may even fit inside his target bracket. Distributions from an inherited IRA aren't subject to the 10% additional tax at any age, because death is an exception. That makes an inherited IRA a surprisingly useful early-retirement bridge.

Interaction with early-retirement tax planning

• ACA subsidies: inherited IRA distributions count as income for premium tax credit purposes. Big withdrawals can reduce subsidies. See bridge-year planning.
• Roth conversion space: inherited IRA income uses up bracket room you might have used for your own Roth conversions. Planners often decide which income gets priority each year.
• Can't convert or contribute: a non-spouse beneficiary can't convert an inherited traditional IRA to a Roth or add contributions to it.
• Not part of your pro-rata calculation: inherited IRAs are kept separate from your own IRAs for backdoor math.

Moving and titling

A non-spouse beneficiary must keep the money in an inherited IRA titled with the deceased owner's name for the beneficiary's benefit, and can move it only by trustee-to-trustee transfer. A 60-day rollover isn't available to non-spouse beneficiaries. A distribution check made out to you is just a distribution, and generally can't be put back.

A year-by-year planning routine

1. Year of death: check whether the owner took their own RMD for that year. If not, the beneficiary generally must take it.
2. Retitle the account as an inherited IRA by trustee-to-trustee transfer, and name your own successor beneficiary.
3. Each January: look up the required amount (if annual RMDs apply), then project your income for the year and decide how much more to take to fill your target bracket.
4. Coordinate with other income: wages, Roth conversions, capital gains and ACA subsidy limits.
5. Withholding: choose federal (and state) withholding on each distribution, or make estimated payments, to avoid underpayment penalties.
6. Final year: mark December 31 of the 10th-anniversary year on your calendar, and empty the account before then.

Mistakes happen, especially with multiple custodians. If you miss a required amount, take it as soon as you notice and file Form 5329; correcting within the window can reduce the excise tax from 25% to 10%, and the IRS can waive it for reasonable cause. Keeping one spreadsheet of balances, required amounts and actual withdrawals beats trusting the custodian's notices. Annual RMDs from an inherited IRA use the Single Life Expectancy table, and the factor generally drops by one each year after the first. For background see the RMD rules guide.

Trusts as beneficiaries

When a trust is named as beneficiary, the rules depend on whether it qualifies as a see-through trust and who its beneficiaries are. Conduit and accumulation trusts are treated differently, and applicable multi-beneficiary trusts for disabled or chronically ill beneficiaries have special treatment. This is an area where the trust document and an estate attorney matter more than any general guide, so treat it as a flag to get help rather than a do-it-yourself project.

Spouses have more choices

A surviving spouse can generally roll the IRA into their own IRA or treat it as their own, which restarts normal RMD rules based on the spouse's age. But a spouse under 59½ who might need the money may prefer to keep it as an inherited IRA for a while, because inherited IRA distributions avoid the 10% additional tax. It's a timing decision worth thinking through before acting.