What Is the Inherited IRA 10-Year Rule?

Most non-spouse heirs who inherit an IRA from someone who died in 2020 or later have 10 years to empty it. The deadline is December 31 of the year that contains the 10th anniversary of the death. A traditional inherited IRA is generally taxable as the money comes out. Florida does not add a state income tax. The federal tax still applies.

A spouse is a different case. So is a small group called eligible designated beneficiaries. This page is the rule, not a tax return. The account titling sits with inheritance planning.

Who follows the 10-year rule

A designated beneficiary who is not an eligible designated beneficiary. In plain language: an adult child, a grandchild, a sibling more than 10 years younger, or most other named people.

The account does not have to come out in equal pieces. It does have to be at zero by the deadline. Waiting until year 10 puts the whole remaining balance into one tax year.

How to count the 10 years

The clock starts at the date of death, not at the date the custodian finally retitles the account.

• Death in March 2026. The 10th anniversary is March 2036. The account must be empty by December 31, 2036.
• A delay at the custodian does not move that December. Paperwork can eat a year. The deadline does not care.
• Withdrawals can be uneven. Nothing in the rule requires $30,000 a year. The account only has to hit zero by the end of year 10.
• Each withdrawal from a traditional inherited IRA is generally ordinary income in the year it comes out. A large withdrawal in year 10 stacks on top of wages.

If the owner had already started required distributions, add an annual withdrawal during those 10 years. Required distributions for an owner generally start at age 73. If the owner died before that, the annual amount is generally not required. Write down which one applies before the first check.

Who can use a different rule

Eligible designated beneficiaries can stretch withdrawals over life expectancy. The IRS list is short:

• the surviving spouse
• the owner’s minor child, until that child reaches the age of majority, after which the 10-year clock generally starts
• a disabled person
• a chronically ill person
• a beneficiary not more than 10 years younger than the owner

A spouse can also roll the IRA into their own IRA. That choice changes when their own required distributions start. It is not the same as staying a beneficiary.

Annual withdrawals inside the 10 years

If the owner died after required minimum distributions had started, the beneficiary generally must take a withdrawal each year of the 10-year period and still empty the account by the end of year 10. Required distributions for the owner generally start at age 73.

If the owner died before those distributions started, the annual withdrawal is generally not required. The 10-year empty-the-account deadline still is.

A missed required withdrawal can draw a penalty, generally 25% of the amount that should have come out, and 10% if it is corrected in time. The custodian does not always calculate the inherited amount for you.

Two choices for a spouse

A surviving spouse is not stuck with the 10-year rule.

• Treat the IRA as their own. The spouse rolls it into an IRA in their name. Their own required distributions follow their age, generally 73. This is often the cleaner path when the spouse is younger than the owner was.
• Stay a beneficiary. The spouse leaves the account titled as inherited. Distributions can follow the beneficiary rules, which sometimes lets a younger spouse wait longer before taking money. The custodian has to offer the choice. It is not automatic.

An adult child does not get those two choices. A trust named as beneficiary can change the result again. An estate attorney reads the trust. This page does not.

A simple example

These numbers are hypothetical. They are not a tax projection.

An adult child inherits a traditional IRA of $300,000 in 2026. The owner had already started required distributions. The child is not a spouse and is not disabled. The account must be empty by December 31, 2036.

If the child waits and withdraws all $300,000 in 2036, that year’s income includes $300,000 plus wages. If the child withdraws about $30,000 a year, the tax is spread, and the account can still earn a return on what remains. The even split is not required. The deadline is.

A Roth IRA inherited by the same child still follows the 10-year empty rule in most cases. Qualified Roth withdrawals are not ordinary income the way traditional IRA withdrawals are. The deadline is the part people miss.

What changes the answer

• The year of death. Deaths in 2019 and earlier can still be on the old stretch rules. Deaths in 2020 and later use the SECURE Act rules.
• Spouse or not. A spouse has choices an adult child does not.
• Whether the owner had started required distributions. That fact decides the annual withdrawal inside the 10 years.
• Traditional or Roth. The deadline can match. The tax on the way out does not.
• A trust as beneficiary. A trust can change who counts as a designated beneficiary. An estate attorney reads the trust. This page does not.

The common mistake

Treating the 10-year rule as “no withdrawals until year 10.” If the owner had started required distributions, the annual withdrawal still applies. The other mistake is a spouse who assumes they must empty the account in 10 years. They usually have a better option, and it has to be chosen on purpose.

Questions to ask the custodian

• What was the date of death, and had required distributions started?
• Am I the spouse, or a different beneficiary?
• Is this traditional, Roth, or both?
• What is the exact year the account must be at zero?
• Does the custodian calculate an annual amount, or do I have to request it?

When the inheritance review helps

Ask before the first withdrawal. The titling, the beneficiary form, and the tax year of the withdrawal are easier to set before money moves. That coordination is the work on the inheritance page. An attorney drafts the trust. A CPA files the return.

If you inherited an IRA and the 10-year clock is already running, request a retirement readiness review.