How Do RMDs Work If You Inherit From Someone Already Taking Them? (w/Examples) + FAQs

This article reflects federal rules as of June 2026 and covers tax years 2025 and 2026. It also explains the general state-tax angle. Tax law changes often — confirm current figures with IRS Publication 590-B before you act. This article is educational and is not a substitute for advice from a licensed CPA, tax attorney, or estate attorney for your specific situation.

Quick Answer

You must keep taking yearly RMDs. If you inherit a traditional IRA from someone who already started required minimum distributions (RMDs), and you are a non-spouse heir, for tax years 2025 and 2026 you must take an RMD every year and empty the account within 10 years of their death.

The One Rule That Trips Up Almost Everyone

When you inherit a retirement account from a person who was already taking RMDs, the government does not give you a clean break. You step into a payout schedule that is already running, and missing a single year now carries a penalty of up to 25% of the amount you should have withdrawn, under SECURE Act 2.0. The “required beginning date” (RBD) is the deadline by which the original owner had to start RMDs — generally April 1 after the year they turned 73 — and whether they died before or after that date changes everything about your obligations.

This matters because of timing and money. The IRS issued final regulations in 2024 confirming that most non-spouse heirs of an owner who died after the RBD must take annual RMDs during the 10-year window — a rule the agency began enforcing with penalties in 2025, per CNBC reporting. Roughly 13 million Americans inherit retirement accounts each decade, and a large share misjudge these deadlines and lose money to avoidable penalties.

Here is what you will learn:

🧭 How to tell if the person died before or after their required beginning date, and why it flips your duties.
💰 The fully worked dollar math for the year-of-death RMD and your annual inherited-account RMDs.
⏳ How the 10-year rule and yearly RMDs stack on top of each other for non-spouse heirs.
🛡️ How to erase a missed-RMD penalty using Form 5329 and the automatic year-of-death waiver.
🏛️ Whether your state taxes these withdrawals, and which states give retirees a break.

Deconstructing the Topic: The Moving Parts

Inherited-RMD rules combine several separate ideas, and confusion comes from mixing them up. Below is each core piece, what it means in plain words, and why it matters.

The Required Beginning Date (RBD)

The RBD is the date by which the original owner had to start taking RMDs. For tax year 2026 the RMD age is 73, so the RBD is April 1 of the year after the owner turns 73, as explained in IRS RMD guidance. If the owner died on or after this date, the law treats them as “already taking RMDs,” and that is the exact situation this article covers. The consequence is direct: their death does not pause the payout clock, and you inherit a live RMD obligation.

The Year-of-Death RMD

If the owner did not take their full RMD in the year they died, you must take whatever is left by December 31 of that year, per Ed Slott and Company. This is the owner’s final IRA transaction, but it is paid to and taxed on your return, reported on a Form 1099-R coded as a death distribution. Skipping it triggers the excise penalty, though an automatic waiver exists, which we cover below.

The 10-Year Rule

Most non-spouse heirs who inherited in 2020 or later must empty the account by December 31 of the 10th year after the owner’s death, a rule created by the original SECURE Act. When the owner died after their RBD, you also must take an annual RMD in years 1 through 9, then clear the rest in year 10. When the owner died before their RBD, there are no annual RMDs — only the year-10 deadline, per Schwab.

Beneficiary Categories

The IRS sorts heirs into three buckets, and each gets different treatment: surviving spouses, “eligible designated beneficiaries” (EDBs), and ordinary “designated beneficiaries.” Your category controls whether you can stretch payments over your life or are locked into the 10-year clock. Picking the wrong path means either over-withdrawing and overpaying tax, or under-withdrawing and facing a penalty.

Which Situation Applies to You?

Because the answer depends on who you are and when the owner died, find your row before reading further.

You are the surviving spouse. You have the most options, including treating the IRA as your own. Jump to the “Surviving Spouse” section.
You are a minor child, disabled, chronically ill, or less than 10 years younger than the owner. You are likely an eligible designated beneficiary and may stretch payments. See the “Eligible Designated Beneficiaries” section.
You are an adult child, grandchild, sibling, friend, or other non-spouse, and the owner died after their RBD. You face both annual RMDs and the 10-year rule. This is the main case — read the “Non-Spouse” section closely.
You inherited from someone who themselves inherited the account (a successor beneficiary). You do not get a fresh 10-year window. See the “Successor Beneficiary” section.
The beneficiary is an estate, charity, or non-qualifying trust. Different “non-designated” rules apply. See that section.

Surviving Spouse: The Widest Set of Choices

A surviving spouse who inherits from an owner already taking RMDs has options no one else gets, listed in the IRS beneficiary tables. You may treat the IRA as your own, which delays your RMDs until you reach your own RMD age and uses the friendlier Uniform Lifetime Table. You may instead keep it as an inherited IRA and take RMDs over your single life expectancy, recalculated each year.

The consequence of each choice is real money. Treating it as your own usually lowers yearly RMDs and stretches tax-deferred growth, which helps a younger spouse. A common misconception is that a spouse “must” use the 10-year rule like everyone else — that is false; the 10-year rule generally does not apply to spouses who properly elect their options. Your next step is to tell the custodian in writing which treatment you want before December 31 of the year after death, and confirm the year-of-death RMD was taken.

Eligible Designated Beneficiaries: The Stretch Survivors

EDBs are the narrow group still allowed to “stretch” payments over their own life expectancy, escaping the 10-year squeeze, as defined in the 2024 final regulations. This group includes a minor child of the owner (until age 21), a disabled or chronically ill person, and anyone not more than 10 years younger than the owner. Because the owner was already taking RMDs, an EDB must begin annual life-expectancy RMDs by December 31 of the year after death.

The consequence of qualifying is large: smaller yearly withdrawals and decades of extra tax deferral. The trap is the minor-child rule — when that child turns 21, the 10-year clock starts, and the account must empty by their 31st birthday. Your next step is to gather proof of your status (birth records, a doctor’s certification of disability) and give it to the custodian so you are coded correctly.

Non-Spouse Designated Beneficiaries: The Main Event

This is the situation in the article’s title and the one with the most penalties at stake. If you are an adult child, grandchild, sibling, or friend, and the owner died after their RBD in 2020 or later, you must do two things at once: take an annual RMD in years 1 through 9, and fully empty the account by December 31 of year 10, per Fidelity.

Your annual RMD is based on your own single life expectancy from Table I in Publication 590-B, set in the year after death and reduced by one each following year. The IRS waived the annual-RMD penalty for 2021 through 2024 while it finalized the rules, but enforcement began in 2025, so 2025 was the first year missing an annual RMD could cost you. The consequence of skipping any year-1-through-9 RMD is a penalty of up to 25% of the shortfall. Your next step is to confirm the death year, pull your life-expectancy factor, and set a recurring annual withdrawal with the custodian.

How the Two Rules Stack

Many heirs wrongly believe the 10-year rule replaces annual RMDs — it does not when the owner died after their RBD. You must satisfy both: a yearly minimum during the window and a full payout by the end. Failing either one creates a separate penalty exposure, so treat them as two boxes you check every year.

Successor Beneficiaries: No Fresh Clock

A successor beneficiary inherits an account that was already an inherited IRA — for example, you inherit from your sibling who had inherited it from your father. You do not get a new 10-year period; you finish the time left on the original schedule, per Ed Slott and Company. If your sibling was already using the 10-year rule and died in year 5, you must empty the account by the end of the original year 10.

The consequence is a compressed timeline and possibly large taxable withdrawals in a short span. One important nuance: if the first beneficiary was an EDB who was stretching payments, the successor does get a 10-year period but must continue annual RMDs in years 1 through 9 based on the EDB’s life expectancy, per Greenleaf Trust. Your next step is to ask the custodian for the original owner’s date of death and the prior beneficiary’s status before you plan any withdrawals.

Estates, Charities, and Non-Qualifying Trusts

When there is no “designated beneficiary” — the named heir is an estate, a charity, or a trust that does not qualify — and the owner died after the RBD, the account pays out over the owner’s remaining single life expectancy, per the IRS beneficiary chart. This is often called the “ghost life expectancy” rule. It can be better or worse than the 10-year rule depending on the owner’s age at death.

The consequence is less flexibility and, for estates, distributions taxed inside the estate or passed to heirs as income. A common misconception is that naming “my estate” is simple and safe — it usually removes valuable stretch options. Your next step, if you are an executor, is to consult an estate attorney about whether the trust can be treated as a “see-through” trust to preserve better treatment.

Worked Numeric Examples (the Math IRS.gov Won’t Show You)

Below are step-by-step examples with real dollars so you can copy the method.

Example A — Year-of-death RMD. Diana’s father, age 80, dies in March 2026 before taking his 2026 RMD. His IRA was worth $410,000 on December 31, 2025, and his Uniform Lifetime factor at 80 is 20.2. His 2026 RMD is $410,000 ÷ 20.2 = $20,297. Diana must withdraw that $20,297 by December 31, 2026, and report it on her 2026 return.

Example B — Annual inherited RMD under the 10-year rule. Marcus, age 50, inherits a $500,000 traditional IRA from his aunt who died in 2025 after her RBD. His single life expectancy factor at age 51 (the year after death) is 35.3. His first annual RMD for 2026 is $500,000 ÷ 35.3 = $14,164. Each later year he reduces the factor by one (34.3, 33.3, and so on), then empties any balance by December 31, 2035.

Example C — Missed-RMD penalty math. Priya should have taken an $18,000 inherited RMD in 2025 but forgot. The base penalty is 25% × $18,000 = $4,500. If she withdraws the $18,000 and files Form 5329 within the correction window, the penalty drops to 10% × $18,000 = $1,800, per SECURE 2.0 §302. If the IRS grants a reasonable-cause waiver, it can fall to $0.

Three Common Scenarios

Scenario 1 — Adult child inherits from a parent who died after RBD.

Your Situation	What Happens
Parent age 78 dies in 2026, traditional IRA, you are 52	You take any unpaid 2026 year-of-death RMD by Dec 31, 2026
You are a non-spouse designated beneficiary	You take annual RMDs over your life expectancy in years 1–9
Account still has a balance in year 10	You must withdraw everything by Dec 31, 2036

Scenario 2 — You inherit a Roth IRA from someone “already taking RMDs.”

Your Situation	What Happens
Roth owner never had lifetime RMDs (Roth owners are exempt)	No year-of-death RMD applies to a Roth
You are a non-spouse heir	No annual RMDs during years 1–9
The 10-year rule still applies	You must empty the Roth by Dec 31 of year 10

Scenario 3 — You are a successor beneficiary.

Your Situation	What Happens
You inherit from a sibling who used the 10-year rule	You do not get a new 10-year clock
Sibling died in year 4 of the original window	You finish years 5–10 of the original schedule
Annual RMDs were required for the original heir	You continue those same annual RMDs

Federal vs. State: Does Your State Tax These Withdrawals?

Start with the federal rule: every dollar you pull from an inherited traditional IRA is ordinary income on your federal return, while qualified Roth withdrawals are federally tax-free, per IRS Publication 590-B. States do not automatically follow these rules, and the difference can be thousands of dollars a year.

Here is how states generally line up:

State Treatment	What It Means for You
No state income tax (e.g., Florida, Texas, Tennessee, Nevada)	The withdrawal is not taxed at the state level at all
States that fully tax retirement income	The inherited traditional IRA distribution is taxed like wages
States with retirement-income exclusions (e.g., Illinois, Pennsylvania)	Some or all of the distribution may be state-tax-exempt

Your next step is to check your state revenue agency’s page on retirement-income taxation, because conformity and exclusions change and many states cap the exclusion by age or income.

Deadlines, Costs, and Timing

The two dates that cause the most penalties are December 31 of the year of death (year-of-death RMD) and December 31 each year after for annual RMDs, per IRS guidance. Setting up an inherited IRA at a custodian usually takes one to three weeks, so do not wait until late December. Doing the math and withdrawals yourself is free, while a CPA’s help on a single inherited IRA often runs $300 to $800, and full estate work with an attorney can run $1,500 or more.

Mistakes to Avoid

Skipping the year-of-death RMD. This triggers a penalty of up to 25% of the amount the owner should have taken.
Assuming the 10-year rule cancels annual RMDs. When the owner died after their RBD, you owe both, and missing the yearly one is penalized.
Rolling an inherited IRA into your own IRA as a non-spouse. This is not allowed and creates a fully taxable distribution of the whole account.
Using the wrong life-expectancy table. Using the owner’s factor instead of your own can make your RMD too small and cause a shortfall penalty.
Missing the December 31 of year 10 deadline. Any leftover balance becomes subject to the excise penalty on the full remaining amount.
Mixing inherited accounts from different owners. You cannot combine them, and aggregating RMDs incorrectly creates shortfalls.
Ignoring state tax. Withdrawing a large lump sum in one year can push you into a higher state bracket and inflate your bill.
Forgetting Form 5329 after a missed RMD. Without it, you cannot claim the reduced 10% rate or a waiver.

Do’s and Don’ts

Do confirm the owner’s date of death and RBD status first — it decides whether you owe annual RMDs at all.
Do open a properly titled inherited IRA (“[Owner], deceased, for the benefit of [you]”), because correct titling preserves your tax options.
Do take the year-of-death RMD before December 31 to avoid the first and most common penalty.
Do file Form 5329 if you miss an RMD, since it is the only way to get the 10% rate or a full waiver.
Do check your state’s retirement-income rules, because state tax can equal or exceed the cost of mistakes.
Don’t roll a non-spouse inherited IRA into your own account, as it forces full taxation immediately.
Don’t assume Roth inherited IRAs have annual RMDs — they do not, but the 10-year payout still applies.
Don’t wait until December to set up the account, because custodian processing can miss the deadline.
Don’t guess your beneficiary category, since spouses, EDBs, and ordinary heirs follow different schedules.
Don’t ignore the year-10 cliff, because a forgotten balance is penalized on the entire remaining sum.

Pros and Cons of the Inherited-RMD Rules

Pro: Tax deferral continues — money keeps growing tax-deferred for up to 10 years, which is valuable.
Pro: Flexibility within the window — outside the annual minimum, you choose when to take more, helping you manage your tax brackets.
Pro: Reduced penalty regime — the SECURE 2.0 drop from 50% to 25% (and 10% if corrected) softens honest mistakes.
Pro: Spousal and EDB stretch options — some heirs still spread income over decades, lowering lifetime tax.
Pro: Automatic year-of-death waiver — the IRS now forgives a missed final RMD if taken by your filing deadline.
Con: Forced taxable income — annual RMDs add to your income whether you need the cash or not.
Con: The 10-year cliff — large balances can force a big taxable withdrawal in year 10.
Con: Complexity and penalty risk — overlapping rules make mistakes easy and costly.
Con: No stretch for most heirs — the old lifetime stretch is gone for ordinary designated beneficiaries.
Con: State tax surprises — a state with no exclusion can tax every dollar on top of federal tax.

What to Do Next

Confirm the owner’s date of death and whether it was on or after their required beginning date.
Identify your beneficiary category — spouse, EDB, ordinary designated beneficiary, or successor.
Take any unpaid year-of-death RMD before December 31 of the year of death.
Open a correctly titled inherited IRA and request a recurring annual RMD if one is required.
Pull your single life-expectancy factor from Table I and calculate each year’s minimum.
If you missed an RMD, withdraw the shortfall now and file Form 5329 to claim the reduced rate or a waiver.
Check your state’s tax treatment and call a CPA if the balance is large or the trust rules apply.

Frequently Asked Questions

Do I have to take annual RMDs if I inherit from someone already taking them?

Yes. If you are a non-spouse heir and the owner died on or after their required beginning date, for tax years 2025 and 2026 you must take annual RMDs in years 1–9 and empty the account by year 10.

What is the penalty for missing an inherited RMD?

Up to 25% of the shortfall. Under SECURE 2.0, the penalty is 25% of the amount you failed to withdraw, reduced to 10% if you correct it and file Form 5329 within the two-year correction window.

When is the year-of-death RMD due?

December 31 of the year of death. If the owner died without taking that year’s full RMD, you must withdraw the remainder by year-end, though an automatic waiver applies if you take it by your tax filing deadline.

Does the 10-year rule replace annual RMDs?

No. When the owner died after their required beginning date, you must take both annual RMDs and empty the account within 10 years. The 10-year rule only stands alone if the owner died before the RBD.

Do inherited Roth IRAs have annual RMDs?

No. Roth owners never had lifetime RMDs, so there is no year-of-death RMD and no annual RMD for heirs, but the full account must still be withdrawn by the end of year 10.

Can a non-spouse roll an inherited IRA into their own IRA?

No. Only a surviving spouse can treat an inherited IRA as their own. A non-spouse who moves it into a personal IRA causes the entire account to become immediately taxable.

What life expectancy do I use for my annual RMD?

Your own single life expectancy. Use your age in the year after death from Table I in Publication 590-B, then subtract one from that factor each following year.

Does my state tax inherited IRA withdrawals?

It depends on your state. States with no income tax do not tax them, some states fully tax them as ordinary income, and others offer retirement-income exclusions that may shield part or all of the distribution.

Do successor beneficiaries get a new 10-year period?

No. If the prior beneficiary was using the 10-year rule, you finish the time remaining on that original schedule rather than starting a fresh 10-year clock.

How do I fix a missed RMD?

Take the missed amount and file Form 5329. Withdraw the shortfall right away, then file Form 5329 with your return to request the reduced 10% rate or a full reasonable-cause waiver of the penalty.

Who pays tax on the year-of-death RMD?

You, the beneficiary. The distribution is reported on a Form 1099-R with your tax ID and is taxed on your personal return, not the deceased owner’s final return or the estate’s return.

Does turning down (disclaiming) an inherited IRA avoid RMDs?

Yes, but only if done correctly. A qualified disclaimer within 9 months passes the account to the next beneficiary, but it must meet strict IRS rules and you cannot have accepted any benefits first.

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