Does the 10-year rule apply to Roth IRAs?

Yes. Non-spouse beneficiaries of inherited Roth IRAs are also subject to the 10-year rule. However, Roth IRA distributions are generally income-tax-free (if the 5-year holding rule is met). The 10-year rule still requires the account to be emptied — you just don't pay income tax on the distributions.

What if you inherit an IRA from a parent who was already taking RMDs?

If your parent (or other non-spouse IRA owner) had already started RMDs before death, you as a non-spouse beneficiary must: (1) take the remainder of the year-of-death RMD if not yet taken, and (2) take annual distributions in years 1–9 using your single life expectancy. The account must still be fully empty by year 10.

Are there penalties for taking too little from an inherited IRA?

Yes. If annual distributions are required and you fail to take the minimum, a 25% excise tax applies to the shortfall. If you fail to fully distribute by year 10, the same penalty applies to the remaining balance. You can request a penalty waiver from the IRS on Form 5329 if there is a reasonable cause.

Scenario

Inherited IRA 10-Year Rule — Distribution Requirements for Non-Spouse Beneficiaries

How does the 10-year distribution rule work for inherited IRAs?

Under SECURE Act 1.0 (effective January 1, 2020), most non-spouse IRA beneficiaries must fully empty an inherited IRA by December 31 of the 10th year following the original owner's death. This replaced the old "stretch IRA" rule that allowed beneficiaries to take distributions over their own lifetime.

A critical nuance added by IRS regulations in 2022: if the original IRA owner had already started taking RMDs (passed their Required Beginning Date), the beneficiary must also take annual distributions in years 1–9 of the 10-year window — not just empty the account by year 10. These annual distributions use the beneficiary's single life expectancy factor.

Key RMD Rules

110-year rule: full distribution required by December 31 of the 10th anniversary of the owner's death.
2Annual distributions (years 1–9): required if the original owner had started RMDs before death.
3No annual distribution required in years 1–9 if the owner died before their Required Beginning Date.
4Eligible Designated Beneficiaries (surviving spouse, minor children, disabled, chronically ill, within 10 years of age) may use life expectancy stretch instead.
5Roth IRA inheritors: still subject to 10-year rule, but distributions are income-tax-free.

Annual Distribution Requirement: Did the Owner Start RMDs?

Key question: had the original owner passed their Required Beginning Date? If YES (owner started RMDs before death): beneficiaries must take annual distributions in years 1–9 using their own single life expectancy factor. If NO (owner died before RMD age): no annual distributions required. Just ensure the account is fully empty by December 31 of year 10. This distinction dramatically affects distribution planning.

Strategies for Maximizing the 10-Year Window

If annual distributions are required: take the minimum required amount each year. In years where you are in a higher income bracket, take less (just the minimum). In lower-income years, take more voluntarily to reduce the balance before year 10. If no annual distributions are required: consider spreading distributions over all 10 years to avoid a large year-10 spike. A spike in year 10 could push income into a higher bracket and trigger IRMAA.

Common RMD Mistakes to Avoid

⚠Assuming no annual distributions are required in years 1–9 — if the original owner had started RMDs, annual distributions ARE required during the 10-year window.
⚠Missing the year-10 full distribution deadline — a 25% excise tax applies to any remaining balance.
⚠Keeping the inherited IRA titled incorrectly — it must be titled as an inherited IRA, not rolled into the beneficiary's own IRA (for non-spouse beneficiaries).

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Frequently Asked Questions

Disclaimer: This content is for informational purposes only and does not constitute tax or financial advice. RMD rules are based on IRS Publication 590-B and SECURE 2.0 Act provisions. Always consult a qualified tax professional or financial advisor for guidance specific to your situation. IRS rules may change; verify current requirements at irs.gov.

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