If you've inherited an IRA, two questions set your options: were you the deceased person's spouse, and had they already started taking their required minimum distributions? Most non-spouse heirs must empty the account within 10 years, and if the original owner had begun RMDs, they also have to take an annual withdrawal along the way.

Inheriting an IRA as a spouse

If you inherit an IRA as the sole beneficiary and you're the spouse, you can take it over, sometimes called a spousal transfer or "assuming" the IRA. As far as the IRS is concerned, it becomes yours, with all the normal ownership rights.

You have a few ways to do it: move the assets into an IRA you already own (the two must have the same tax treatment, both traditional or both Roth), designate yourself the owner of the existing account by filing a form with the firm that holds it, or open a new IRA in your name for the funds.

Assuming the IRA means the 10-year rule below does not apply. Instead, standard ownership rules apply, including required minimum distributions once you reach your own RMD age. A spouse who is not the sole beneficiary, or who chooses to remain a beneficiary rather than assume the account, follows the non-spouse rules.

Inheriting an IRA as a non-spouse

If you're not the spouse (or you're a spouse who is not the sole beneficiary), the rules are stricter. The key limit: you cannot roll an inherited IRA into an account you already own.

Instead, you set up a new inherited IRA (also called a beneficiary IRA), titled in the decedent's name for your benefit, for example "Person X, deceased, for the benefit of Person Y." You file a change-of-beneficiary form with the firm that holds the IRA and transfer the inherited funds into the new account. You cannot make new contributions to an inherited IRA.

Withdrawing from an inherited IRA

The 10-year rule

Most non-spouse beneficiaries must withdraw everything from an inherited IRA within 10 years of the original owner's death. This applies to all IRAs where the owner died after December 31, 2019.

Under the IRS's 2024 final regulations, whether you also owe annual withdrawals during those 10 years depends on the owner's age at death:

• If the owner died on or after their required beginning date (they had already started their own RMDs), you must take an annual RMD in years one through nine, based on your life expectancy, and empty the account by the end of year 10.
• If the owner died before their required beginning date, there are no annual RMDs. You can withdraw in any amounts, on any schedule, as long as the account is empty by the end of year 10.

Missing a required annual withdrawal triggers a 25% excise tax on the shortfall, reduced to 10% if you correct it within two years.

Taxes on an inherited IRA

Withdrawals from an inherited traditional IRA are taxed as ordinary income in the year you take them, the same as for the original owner. That makes the timing of withdrawals a planning question: emptying a large account in year 10 can spike your tax bill, so spreading withdrawals across the decade often costs less.

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Inherited Roth IRAs

An inherited Roth IRA still follows the 10-year rule for most non-spouse beneficiaries, but the withdrawals are usually tax-free. You can take out the original owner's contributions tax-free at any time. Earnings are tax-free if the account had been open at least five years, measured from the owner's first Roth contribution. If the account was younger than five years when the owner died, earnings are taxable (contributions are not) until that five-year mark passes. A Roth IRA owner is never subject to lifetime RMDs, so "died before the required beginning date" always applies, meaning no annual withdrawals during the 10 years, just empty it by year 10. See Roth IRA withdrawal rules for more.

Exceptions: eligible designated beneficiaries

Some beneficiaries can skip the 10-year rule and instead stretch withdrawals over their own life expectancy. These "eligible designated beneficiaries" are:

A minor child of the account owner

A minor child of the owner (not a grandchild, and not a minor who is someone else's child) takes life-expectancy withdrawals until they reach age 21. At 21, the 10-year clock starts, and the account must be emptied by the end of the tenth year after that.

A chronically ill or disabled person

A beneficiary who is chronically ill or disabled can take withdrawals over their lifetime rather than within 10 years. Whether that's the best choice depends on the situation.

A beneficiary not more than 10 years younger

If you're within 10 years of the deceased person's age, you can stretch withdrawals over your own life expectancy. This applies to non-spouses as well as spouses, which adds flexibility for a sibling or a close-in-age partner.

RMD ages and penalties

For an account owner's own IRA, RMDs now begin at age 73 if born between 1951 and 1959, and age 75 if born in 1960 or later. (It was 72 for those who reached that age in 2020 through 2022, and 70 1/2 before 2020.) That start age is what determines the owner's "required beginning date," which in turn sets whether an inherited-IRA beneficiary owes annual withdrawals during the 10-year window.

A non-designated beneficiary, such as an estate, a charity, or most trusts, follows different timelines: the 5-year rule if the owner died before their required beginning date, or the owner's remaining life expectancy if they died after it.

Failing to take a required distribution costs a 25% excise tax on the amount you should have withdrawn, cut to 10% if you fix it within two years and file Form 5329.

Bottom line

An inherited IRA can be real financial security, but the rules are easy to get wrong, and the penalties are steep. Because the right move depends on your relationship to the owner, their age at death, the account type, and your own tax situation, it's worth reviewing with a Certified Financial Planner or an estate professional before you take a withdrawal. Our estate planning resources cover the beneficiary side in more depth.

Frequently asked questions

What happens when I inherit an IRA?

You become the beneficiary and must follow specific rules for withdrawing from and paying tax on the account. Which rules apply depends on whether you were the owner's spouse, your age relative to theirs, whether the owner had started RMDs, and whether the IRA is traditional or Roth.

Are the rules different for spouses and non-spouse beneficiaries?

Yes. A sole-beneficiary spouse can assume the IRA and treat it as their own, with normal ownership rules and RMDs at their own RMD age. A non-spouse cannot roll an inherited IRA into their own account and generally must empty it within 10 years.

What are the distribution rules for inherited IRAs?

Most non-spouse beneficiaries must withdraw everything within 10 years of the owner's death. If the owner had already started their own RMDs, the beneficiary also takes an annual withdrawal in years one through nine. This applies to both traditional and Roth IRAs, though Roth owners have no lifetime RMDs, so Roth beneficiaries only need to empty the account by year 10.

Do I have to pay taxes on inherited IRA distributions?

From an inherited traditional IRA, yes: each withdrawal is ordinary income in the year you take it. From an inherited Roth IRA, withdrawals are usually tax-free, as long as the account had been open at least five years (measured from the owner's first Roth contribution).

Can I contribute to an inherited IRA?

No. An inherited IRA can only pay out the original owner's assets; you cannot add to it.

What if the original owner had not started taking RMDs?

If the owner died before their required beginning date, most non-spouse beneficiaries follow the 10-year rule with no required annual withdrawals along the way, just empty the account by the end of year 10. Eligible designated beneficiaries can instead take life-expectancy withdrawals.

Are there exceptions to the 10-year rule?

Yes, for eligible designated beneficiaries: a minor child of the owner (life-expectancy withdrawals until age 21, then 10 years), a chronically ill or disabled person, and a beneficiary not more than 10 years younger than the owner. These beneficiaries can stretch withdrawals over their own life expectancy.

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