Inherited Traditional IRA Rules in 2026: RMDs, Taxes, and the 10-Year Rule

A practical guide to beneficiary categories, annual distribution requirements, spouse options, and common tax traps.

Inherited IRA rules in 2026 can require very different actions depending on who inherited the account and whether the original owner died before or on or after the owner's required beginning date. For many adult children and other nonspouse beneficiaries, the 10-year rule is only part of the answer.

The final required minimum distribution regulations generally apply to calendar years beginning January 1, 2025. Under those rules, some beneficiaries must take annual required minimum distributions during years 1 through 9 and also empty the account by the end of year 10. Others may have flexibility to wait, spread distributions over life expectancy, or use a different deadline.

Scope of this guide: This article focuses on Traditional IRAs inherited after 2019. Inherited Roth IRAs, employer plans, deaths before 2020, trusts, estates, and unusual beneficiary arrangements can require different analysis.

Start With Two Questions

Before calculating a distribution, identify two facts: the beneficiary category and the original owner's required beginning date. For an IRA owner, the required beginning date is generally April 1 of the year following the year the owner reaches the applicable RMD age. Depending on the owner's date of birth and the law in effect, that age may be 70 1/2, 72, 73, or 75. The applicable age is generally 73 for someone born from 1951 through 1959 and 75 for someone born January 1, 1960, or later.

Do not substitute the question, 'Had the owner already taken an RMD?' A person can take voluntary withdrawals before the required beginning date, and an owner can die after reaching the applicable age but before the actual required beginning date. The legal test is whether death occurred before or on or after that date.

Who Counts as the Beneficiary?

The SECURE Act framework separates beneficiaries into categories. The labels matter because they determine whether life expectancy payments, the 10-year rule, or another payout method applies.

Beneficiary category	General distribution path	Important detail
Surviving spouse	Own-IRA options or inherited-IRA treatment	A spouse is an eligible designated beneficiary and may have special elections, especially when named as sole beneficiary.
Other eligible designated beneficiary	Life expectancy payments generally apply or may be elected	Includes the owner's child under age 21, a disabled or chronically ill individual, and someone not more than 10 years younger.
Other designated beneficiary	10-year rule	Often an adult child, grandchild, sibling, or friend who does not meet an eligible category.
No designated beneficiary	5-year rule or owner's remaining life expectancy	Can include an estate, charity, or trust that does not qualify for look-through treatment.

Trust note: A trust is not automatically treated as a designated beneficiary. If detailed look-through requirements are met, certain trust beneficiaries may be treated as the designated beneficiaries. Trust documents should be reviewed by qualified tax and legal advisors.

The 10-Year Rule Has Two Different Timelines

A designated beneficiary who is not an eligible designated beneficiary generally must fully distribute the inherited IRA by December 31 of the year containing the 10th anniversary of the owner's death. The annual requirements inside that period depend on the owner's required beginning date.

If the owner died before the required beginning date

When the 10-year rule applies and the owner died before the required beginning date, no annual distribution is generally required before year 10. The beneficiary may withdraw earlier, spread distributions over several years, or wait, as long as the entire account is distributed by the deadline. The custodian agreement can impose additional limits, so confirm the account terms.

If the owner died on or after the required beginning date

When the 10-year rule applies and the owner died on or after the required beginning date, the final regulations generally require annual distributions during years 1 through 9. The remaining balance must still be distributed by the end of year 10. The beneficiary therefore has both an annual RMD obligation and a final deadline to empty the account.

The annual RMD is generally calculated under the applicable life-expectancy rules and may be much smaller than the amount needed to empty the account by year 10. A beneficiary may need distributions above the annual minimum to avoid a large taxable withdrawal in the final year.

Transition relief ended: IRS notices provided excise tax relief for certain missed beneficiary RMDs in 2021 through 2024. That relief did not erase the 10-year deadline, and it does not provide a general waiver for required distributions in 2025 or later.

Surviving Spouses Have Special Choices

A surviving spouse is an eligible designated beneficiary, but spouse rules deserve separate attention. A surviving spouse may be able to treat the IRA as their own, roll eligible amounts into their own IRA or another eligible retirement plan that accepts the rollover, or maintain the account as an inherited IRA. An RMD and certain other amounts are not eligible for rollover.

The best choice depends on both spouses' ages, the deceased spouse's required beginning date, current cash needs, future beneficiary plans, and the value of keeping the account in inherited status. Distributions from an inherited IRA made because of the owner's death generally are not subject to the 10% additional tax. If the spouse moves the assets into their own IRA, ordinary early-distribution rules may apply to withdrawals before age 59 1/2.

Many spouse elections depend on being the sole beneficiary and having an unlimited right to withdraw from the account. A spouse should confirm the proposed treatment with the custodian and tax advisor before requesting a transfer or rollover.

Other Eligible Designated Beneficiaries

An eligible designated beneficiary generally includes the owner's surviving spouse, the owner's child who had not reached age 21 at the owner's death, a disabled individual, a chronically ill individual, or another individual who is not more than 10 years younger than the owner. Eligibility is generally tested as of the owner's date of death.

These beneficiaries may be able to use life-expectancy payments instead of the standard 10-year schedule. The available method can depend on whether the owner died before or on or after the required beginning date. The definitions of disability and chronic illness are technical, and documentation deadlines can apply. Professional review is especially important when this status determines the payout period.

The owner's minor child

The minor-child category applies to a child of the original owner, not to every minor beneficiary. It does not extend to a grandchild merely because the grandchild is under age 21. When the owner's child reaches age 21, the remaining balance generally becomes subject to the 10-year rule and must be distributed by December 31 of the 10th calendar year following the calendar year in which the child reaches age 21.

When There Is No Designated Beneficiary

If the beneficiary is not an individual and the arrangement does not qualify for look-through treatment, the rules change. When the owner died before the required beginning date, the five-year rule generally requires the account to be emptied by December 31 of the fifth calendar year following the year of death. When the owner died on or after the required beginning date, distributions generally continue over the owner's remaining life expectancy.

Estates and trusts can create additional administration, documentation, and income tax issues. The beneficiary form, trust terms, and custodian records should be reviewed before any distribution strategy is selected.

Do Not Miss the Year-of-Death RMD

If the owner died on or after the required beginning date, the beneficiaries are responsible for completing the owner's RMD for the year of death to the extent the owner did not already take it. That amount is calculated as though the owner lived for the full year. It is separate from the beneficiary's RMD for later years.

The final regulations generally provide an automatic excise-tax waiver when the unpaid year-of-death RMD is completed by the beneficiary's tax-filing deadline, including extensions, for the taxable year that begins with or within the year of the owner's death. This relief does not eliminate the obligation to take the distribution, and the precise deadline can depend on the beneficiary and tax year.

If the owner died before the required beginning date, there is no owner RMD for the year of death. This is another reason to confirm the actual required beginning date instead of relying only on age or account statements.

How Inherited Traditional IRA Distributions Are Taxed

Taxable inherited Traditional IRA distributions are generally included in ordinary income. If the original owner made nondeductible contributions or rolled after-tax money into a Traditional IRA, the inherited IRA may have basis and part of each distribution may be nontaxable. The inherited basis must be tracked, and Form 8606 may be required.

A beneficiary of a deceased IRA owner generally qualifies for an exception to the 10% additional tax on early distributions. The ordinary income tax can still apply, and a large withdrawal can increase adjusted gross income, estimated tax payments, Medicare income-related premiums, or the tax cost of other income. Those effects depend on the beneficiary's full tax picture.

For a small business owner, inherited IRA withdrawals may stack on top of wages, pass-through income, capital gains, and other taxable amounts. A withdrawal plan should consider cash needs and tax brackets across the entire 10-year period, not just the current year.

What Happens if an RMD Is Missed?

If a required distribution is too small, the beneficiary may owe an excise tax equal to 25% of the shortfall. The tax may be reduced to 10% when the shortfall is corrected during the statutory correction window. The IRS may waive the tax entirely when the shortfall resulted from reasonable error and reasonable steps are being taken to correct it. Form 5329 is used to report the shortfall, calculate the tax, or request a reasonable-cause waiver.

The correction window generally extends no later than the end of the second taxable year beginning after the missed-RMD year, but it can close earlier following an IRS notice or assessment. If you discover a missed RMD, contact the custodian and tax advisor promptly. The appropriate correction depends on the year, beneficiary category, account balance, and whether special transition relief applied.

Multiple Beneficiaries and Separate Accounts

An IRA with more than one beneficiary can often be divided into separate inherited accounts. For separate-account treatment, an IRA generally must be divided into separate inherited interests by December 31 of the year following the owner's death. Special rules apply to trusts and certain beneficiaries, so review the beneficiary designation and final regulations before relying on separate-account treatment. Missing the deadline can cause beneficiaries to be analyzed together for RMD purposes.

Beneficiaries should also identify who remains a beneficiary on September 30 of the year following death. Timely disclaimers, payouts, trusts, and successor beneficiaries can affect the analysis. These decisions can have legal and tax consequences, so do not redesignate or disclaim an inheritance without advice.

Three Examples

Adult child, owner died before the required beginning date

A parent dies in 2026 before the required beginning date and leaves a Traditional IRA to an adult daughter who is not an eligible designated beneficiary. She generally does not have to take an annual RMD in 2027 through 2035, but the account must be fully distributed by December 31, 2036. She can take earlier distributions to manage taxes and cash flow.

Adult child, owner died on or after the required beginning date

A parent dies in 2026 on or after the required beginning date and leaves the IRA to an adult son who is not an eligible designated beneficiary. He generally must take annual RMDs beginning in 2027 and fully distribute the account by December 31, 2036. If the parent's 2026 RMD was incomplete, the beneficiaries must also finish that year-of-death amount.

Owner's child is under age 21

An IRA owner dies while the owner's child is 17. The child may qualify as an eligible designated beneficiary and use life expectancy payments. When the child reaches age 21, the remaining balance generally becomes subject to a new 10-year deadline. Additional rules apply if the child also qualifies as disabled or chronically ill.

A Practical Checklist for Beneficiaries

1. Confirm the account type and date of death. Traditional and Roth IRAs have different tax rules, and deaths before 2020 can follow a different framework.

2. Determine the beneficiary category. Document whether the beneficiary is a spouse, another eligible designated beneficiary, another designated beneficiary, or a non-designated beneficiary.

3. Verify the owner's required beginning date. Use the owner's date of birth and applicable law. Do not assume the answer from age alone or from whether a withdrawal was taken.

4. Check the year-of-death RMD. If the owner died on or after the required beginning date, determine whether the owner's RMD was completed.

5. Map every deadline. Record annual RMD dates, the final five-year or 10-year deadline, documentation deadlines, and any separate-account deadline.

6. Build a tax-aware withdrawal plan. Coordinate inherited IRA income with business income, wages, capital gains, estimated taxes, and other planning items.

7. Keep calculations and records. Retain beneficiary forms, death certificate, custodian statements, RMD calculations, Form 8606 information, and proof of each distribution.

The Bottom Line

The 10-year rule does not mean every beneficiary can wait until year 10. If the original owner died on or after the required beginning date, many non-eligible designated beneficiaries generally must take annual distributions and still empty the account by the end of the 10th year. Spouses, other eligible designated beneficiaries, and non-designated beneficiaries can have different rules.

Identify the beneficiary category, confirm the owner's required beginning date, complete any year-of-death RMD, and build a written calendar for the remaining distribution period. Then coordinate withdrawals with the beneficiary's complete tax and financial plan.

Need help planning around an inherited IRA? Brilliant Solutions Group can help evaluate how inherited IRA distributions fit with business income, cash flow, estimated taxes, and year-round tax planning. Contact Brilliant Solutions Group.

Sources

Official sources reviewed for this article. Tax laws, regulations, forms, and IRS guidance can change.

IRS Publication 590-B, Distributions from Individual Retirement Arrangements (2025 edition, accessed August 25, 2026)

Final regulations on required minimum distributions (Treasury Decision 10001, applicable to RMDs for calendar years beginning on or after January 1, 2025)

IRS Notice 2024-35, Certain Required Minimum Distributions for 2024 (transition relief for certain missed 2021 through 2024 beneficiary RMDs)

IRS Instructions for Form 5329 (reporting and reasonable-cause waiver instructions for insufficient RMDs)

IRS Retirement Topics - Beneficiary (beneficiary categories and distribution options)

Internal Revenue Code sections 401(a)(9) and 4974 (RMD and excise-tax rules)

Journal of Accountancy, Avoiding a Big Tax Bill on Inherited IRAs (May 2026 planning discussion)

EY, IRS Issues Final Required Minimum Distribution Regulations (2024 analysis of the final regulations)

Important: This article provides general information and is not tax, legal, investment, or financial advice. The correct inherited IRA treatment depends on the account agreement, beneficiary designation, dates, relationships, trust terms, and other facts. Consult qualified advisors and the IRA custodian before taking or moving funds