Inherited IRA RMD Rules: Do You Owe Annual Distributions?

The answer depends on one fact about the original owner — and getting it wrong can cost 25% of the amount you should have taken.

The question the SECURE Act left open — and the IRS finally answered

When the SECURE Act created the 10-year rule in 2020, it was silent on one critical point: must beneficiaries take annual distributions during the 10-year window, or just clear out the account by the year-10 deadline?

The IRS proposed in 2022 that annual RMDs would be required when the original owner had already passed their Required Beginning Date. This surprised many tax professionals who had assumed the 10-year rule simply meant "empty the account by year 10, however you want." The proposal drew significant comment.

In July 2024, the IRS issued final regulations (T.D. 10001) confirming the annual RMD requirement for that group. The regulations also waived all penalties for missed annual distributions for the years 2021–2024 via prior notices (IRS Notice 2022-53, Notice 2023-54, Notice 2024-35).¹ Starting in 2025, the penalty applies.

The one question that determines your rule: when did the owner pass their Required Beginning Date?

The Required Beginning Date (RBD) is the date by which the original IRA owner had to start taking their own RMDs:

• Born 1951–1959: RBD is April 1 of the year following the year they turned 73 (SECURE 2.0, § 107).²
• Born 1960 or later: RBD is April 1 of the year following the year they turned 75.²
• Born 1950 or earlier: RBD was April 1 of the year following the year they turned 72 (under the pre-SECURE 2.0 rules still applicable to that cohort).

If the decedent died on or after that RBD, they had already begun RMDs and the annual distribution rule applies to you as the beneficiary. If they died before reaching their RBD — even one day before — the more flexible pre-RBD rule applies.

Scenario A: decedent died before their Required Beginning Date

You have full flexibility during the 10-year window. There is no minimum you must take in years 1 through 9. You can:

• Take nothing for nine years and liquidate the entire account in year 10
• Take everything in year 1 (if that's optimal for your tax situation)
• Front-load distributions in low-income years and skip high-income years
• Coordinate with Roth conversions from your own IRA in the same year

The only hard constraint is that the account must be fully depleted by December 31 of the 10th year following the year of the owner's death. Miss that deadline and the entire remaining balance is included in your income that year — plus the 25% excise tax.

Strategy note: The optimal pattern for a pre-RBD inherited IRA is almost never equal 10% annual withdrawals. If your income varies over the window — or if you can model a Roth conversion ladder — there's often meaningful tax savings available. See the Roth Conversion Coordinator and the 10-Year Withdrawal Optimizer to model your situation.

Scenario B: decedent died on or after their Required Beginning Date

You must take annual RMDs in each of years 1 through 9, AND the account must be fully depleted by December 31 of the 10th year. Both requirements apply simultaneously — the annual RMDs do not substitute for the 10-year depletion requirement.

Missing an annual RMD triggers a 25% excise tax on the amount you should have taken but didn't (reduced from the prior 50% under SECURE 2.0).³ If you catch and correct the shortfall within a 2-year correction window (for IRA owners), the penalty drops to 10%.

Important 2025 context: The IRS waived penalties for all missed annual inherited-IRA distributions from 2021 through 2024 via notices. The waivers are done. If you inherited a post-RBD IRA in 2020 or later and took nothing in 2025, you owe the 25% excise tax on the missed amount when you file. The first no-penalty year is gone.

How to calculate your annual RMD (post-RBD inherited IRA)

Annual RMDs for inherited IRAs use the Single Life Expectancy Table in IRS Publication 590-B, Appendix B, Table I — not the Uniform Lifetime Table that the original owner used.⁴

Step 1: Find your age as of December 31 of the year following the IRA owner's death. Look up that age in the Single Life Expectancy Table to get your initial life expectancy factor.

Step 2: For each subsequent distribution year, reduce that factor by 1. Divide the prior December 31 account balance by the factor.

Fidelity, Schwab, and Vanguard all publish the Single Life Expectancy Table online. Your IRA custodian may calculate the annual RMD for you — but you, not the custodian, are legally responsible for taking the correct amount.

The 10-year endpoint applies regardless of which rule you follow

A common misunderstanding: beneficiaries who take annual RMDs sometimes assume those distributions satisfy their obligations and they can stop after year 9. That's wrong. The annual RMDs are a minimum floor during the window — the 10-year full-depletion deadline runs independently.

If you've been taking the required annual minimum each year but the account still has a balance on December 31 of year 10, you must withdraw the entire remaining balance that year. There is no extension.

Inherited Roth IRAs: still no annual RMDs

Inherited Roth IRAs are subject to the 10-year depletion rule but not to the annual RMD requirement — even if the original Roth IRA owner died after what would have been their RBD. This is because Roth IRAs have no RBD: the owner was never required to start distributions. Without an RBD, the post-RBD split that triggers annual RMDs for traditional IRAs cannot apply.⁵

For an inherited Roth IRA, you can defer the entire account to year 10 and take a lump sum — fully tax-free if the 5-year holding rule is satisfied. See the Inherited Roth IRA guide for the full rule set.

Trust beneficiaries and the annual RMD rule

If a trust is the beneficiary of an IRA and the trust qualifies as a "see-through" trust (also called a "look-through" trust), the IRS looks through the trust to the underlying beneficiaries to determine treatment. Whether annual RMDs apply follows the same post-RBD / pre-RBD logic based on the oldest trust beneficiary's situation.

Non-qualifying trusts — and estates — are subject to the 5-year rule (if the owner died before RBD) or must take distributions over the owner's remaining life expectancy (if after RBD). These rules differ meaningfully from the individual beneficiary rules. Trust-as-beneficiary situations are among the most advisor-dependent scenarios in inherited IRA planning.

How planning changes under each scenario

Pre-RBD decedent: maximize flexibility

Your primary lever is timing. Run a multi-year tax projection across the 10-year window. Look for:

• Years with unusually low income (career break, early retirement, business loss year)
• Years before you start Social Security or before Medicare premium IRMAA surcharges kick in
• Years when you have large deductions that can absorb higher income
• Roth conversion opportunities in your own IRA during the same window (fill the bracket with inherited IRA withdrawals or coordinated Roth conversions, not both at full rate)

Post-RBD decedent: work around the floor

Your annual RMD is a minimum, not a prescription. If your tax situation supports it, take more than the minimum in low-income years to reduce the year-10 spike. Common mistakes include:

• Taking only the annual minimum every year, then facing a large year-10 distribution that pushes into a higher bracket or triggers IRMAA Medicare surcharges
• Missing the annual RMD deadline (December 31) and incurring the 25% excise tax
• Failing to coordinate the inherited IRA distributions with Roth conversions from your own accounts — creating redundant taxable income in the same year when spacing them out would cost less

When does an advisor actually add value here?

The mechanical rules are publicly available. What a specialist adds:

• Multi-year tax modeling: projecting your income across all 10 years — salary, Social Security, other retirement accounts, the inherited IRA — and finding the lowest-total-tax distribution pattern.
• Roth conversion coordination: determining how much to convert from your own IRA in the same years you take inherited IRA withdrawals, to maximize the bracket and minimize IRMAA exposure.
• Year-10 management: making sure you don't arrive at year 10 with a balance that creates a large, unanticipated tax spike — and that you've positioned enough in Roth or after-tax accounts to absorb the hit if it happens.
• Trust and multi-beneficiary cases: navigating the fractional-interest rules when an IRA has multiple named beneficiaries, or determining whether a trust qualifies as see-through and what that means for annual RMD obligations.

Sources

1. IRS T.D. 10001, "Required Minimum Distributions," finalized July 18, 2024. IRS Notice 2024-35 (waiving 2024 penalties); Notice 2023-54 (2023); Notice 2022-53 (2021–2022). IRS Notice 2024-35 (PDF).
2. SECURE 2.0 Act of 2022, § 107 (amending IRC § 401(a)(9)(C)). RBD age 73 for individuals born 1951–1959; RBD age 75 for those born 1960 or later. IRS — Retirement Topics: RMDs.
3. SECURE 2.0 Act, § 302 (amending IRC § 4974). Excise tax on missed RMDs reduced from 50% to 25%; further reduced to 10% if corrected within a 2-year correction window. IRS — Correcting RMD Failures.
4. IRS Publication 590-B (2025), Appendix B, Table I (Single Life Expectancy). IRS Publication 590-B. Age 55 life expectancy factor = 31.6 (2025 table values per T.D. 9930 updated tables, effective 2022+).
5. Inherited Roth IRAs have no RBD because Roth IRA owners are not subject to lifetime RMDs under IRC § 408A(c)(5). Per T.D. 10001, the post-RBD annual RMD trigger requires an actual RBD, which Roth IRAs lack. IRS — RMDs for IRA Beneficiaries.

Tax rules verified against 2026 IRS guidance. RMD amounts, ages, and penalty rates reflect IRS Publication 590-B (2025 edition, covering 2025 tax year), SECURE 2.0 Act as enacted, and T.D. 10001 final regulations effective for distributions beginning in 2025.