Who Takes the IRA Owner’s Final RMD in the Year of Death? (w/Examples) + FAQs

This article reflects federal rules and general state-income-tax treatment as of June 2026 and covers tax years 2025 and 2026. Tax law changes — confirm current figures with IRS.gov before you file.

Quick Answer

The beneficiary who inherits the IRA takes the owner’s final required minimum distribution (RMD) — not the estate or the executor. If the owner died in 2025 or 2026 before taking that year’s RMD, the beneficiary must withdraw it. The deadline is now generally December 31 of the year after death, with an automatic penalty waiver.

This matters because the money does not stop being owed when the owner dies. The IRS still wants that final withdrawal, and the responsibility shifts to whoever inherits the account. If you are settling a parent’s or spouse’s estate, you may be staring at a deadline you did not know existed and a penalty that used to reach 25% of the amount you missed.

The stakes are real and the clock is real. Roughly 73 million Americans owned IRAs as of year-end 2024, and a large share of older owners face mandatory withdrawals every year. When one of them dies mid-year, the final RMD does not vanish — it lands on the people left behind. Here is what you will learn:

• 💀 Who is legally on the hook for the final-year RMD when the owner dies before taking it.
• 📅 The new December 31 next-year deadline and the automatic penalty waiver under the 2024 final regulations.
• 🧮 Worked dollar examples showing exactly how to split the RMD among several heirs.
• 📝 A line-by-line Form 5329 walkthrough to erase the penalty if you missed the date.
• ⚠️ The seven costliest mistakes that turn a routine withdrawal into a tax headache.

What “the Final RMD” Actually Means

A required minimum distribution is the minimum amount the IRS forces you to pull out of a traditional IRA each year once you reach your required beginning date. Congress created RMDs so that tax-deferred retirement money does not stay sheltered forever. The government deferred tax on those dollars for decades, and RMDs are how it finally collects.

The final RMD is the withdrawal owed for the calendar year in which the owner dies. If the owner already took the full RMD before passing away, there is nothing left to do for that year. The problem appears when the owner dies before taking all of it — the unsatisfied portion still must come out by year-end rules, and someone has to take it.

The key trigger is the required beginning date (RBD). Under the SECURE 2.0 Act, the RMD starting age is 73 for people born between 1951 and 1959, and 75 for those born in 1960 or later. The RBD itself is April 1 of the year after you turn your starting age. If the owner died on or after reaching the RBD, a year-of-death RMD is in play. If the owner died before the RBD, there is no final-year RMD to take at all.

The consequence of misreading this is expensive. If a year-of-death RMD was owed and nobody takes it, the IRS can impose an excise tax of up to 25% of the missed amount. A common misconception is that death cancels the RMD — it does not. What you should do is confirm two facts right away: had the owner reached the RBD, and did they take the full RMD before death? Those two answers decide everything that follows.

Who Takes It — The Core Answer

The beneficiary takes the final RMD. Once the owner dies, the IRA passes to whoever is named on the beneficiary form. That person — or those people — must withdraw any RMD the owner did not take before death. The estate does not take it unless the estate itself is the named beneficiary or no beneficiary was named.

This is the single most misunderstood point in the whole topic. People assume the executor handles it as part of the estate. In most cases the executor never touches it, because a properly titled IRA passes outside probate directly to the named beneficiary. The withdrawal is reported on the beneficiary’s tax return, not the estate’s, and the taxable income belongs to the beneficiary.

The amount owed is calculated as if the owner were still alive. You use the owner’s age and the same life-expectancy or uniform table the owner would have used, not the beneficiary’s age. The beneficiary simply finishes the withdrawal the owner started. After the year of death, a different set of rules — usually the 10-year rule or annual stretch RMDs — governs the inherited account going forward.

The consequence of sending this RMD to the wrong party is a misreported return and possible double taxation headaches. The misconception that “the estate pays the tax” can cause an executor to needlessly open an estate account or delay the distribution. What you should do is pull the beneficiary designation form from the IRA custodian first — that document, not the will, controls who takes the money.

The New Deadline and Automatic Waiver (2024 Final Regulations)

This is the biggest recent change, and it works in the beneficiary’s favor. On July 19, 2024, the IRS released final RMD regulations that reshaped the year-of-death deadline for deaths occurring on or after January 1, 2025.

Under the old rule, the beneficiary had to take the missed final RMD by December 31 of the year of death. That was a brutal deadline — if the owner died in late December, the heir had days to act, often before they even knew the IRA existed. Missing it triggered the excise tax.

Under the new rule, if a beneficiary fails to take the year-of-death RMD by December 31 of the death year, there is an automatic waiver of the excise tax — as long as the beneficiary takes the RMD by the extended deadline. As Phillips Lytle explains, the deadline is the later of the beneficiary’s tax-filing deadline for that year or the end of the following calendar year. For most traditional IRA beneficiaries, this means December 31 of the year after the owner’s death.

The consequence of this change is enormous relief. A real misconception is that the deadline is still the death year — it is not for 2025 and later deaths. What you should do is mark December 31 of the following year on your calendar and take the RMD by then. You still must take it; the waiver removes the penalty, not the obligation.

Which Situation Applies to You?

The answer shifts depending on who you are and how the IRA was set up. Find your situation below and read the matching section.

• You are the sole spouse beneficiary. You take the final RMD, then choose to treat the IRA as your own or remain a beneficiary. Read the spouse example below.
• You are one of several named beneficiaries. The heirs together must satisfy the full final RMD; the IRS does not care which of you takes it. Read the multiple-beneficiary section.
• You are a non-spouse beneficiary (adult child, sibling, friend). You take the final RMD, then the 10-year rule usually governs the rest. Read the named examples.
• No beneficiary was named, or the estate is the beneficiary. The executor handles the final RMD through the estate. Read the no-designated-beneficiary section.
• The account is a Roth IRA. There is no owner RMD during life, so there is no year-of-death RMD. Read the Roth section.

How to Calculate the Final RMD (Worked Example)

The math uses the owner’s numbers, not yours. You take the IRA balance as of December 31 of the year before death and divide it by the owner’s life-expectancy factor for the death year. For an owner who was taking lifetime RMDs, that factor comes from the Uniform Lifetime Table in IRS Publication 590-B.

Here is a fully worked example for tax year 2026. Harold, age 78, dies in August 2026 without taking his RMD. His traditional IRA was worth $500,000 on December 31, 2025. The Uniform Lifetime Table factor for age 78 is 22.0.

• Step 1: Prior year-end balance = $500,000.
• Step 2: Uniform Lifetime factor for age 78 = 22.0.
• Step 3: Final RMD = $500,000 ÷ 22.0 = $22,727.27.

So $22,727 must come out of the IRA, taken by the beneficiary, and reported as taxable income on the beneficiary’s return. If Harold had already withdrawn $10,000 before he died, only the $12,727 shortfall remains for the beneficiary to take. The consequence of using the wrong factor or balance is an under-withdrawal that exposes you to the excise tax, so copy the math exactly and keep the custodian’s year-end statement as proof.

Named Examples

Example 1 — Maria, the Sole Spouse Beneficiary

Maria’s husband, age 74, dies in March 2026 having taken none of his $18,000 RMD for 2026. Maria is the sole primary beneficiary. She must withdraw the $18,000 final RMD, which she reports on her own 2026 return. Under the new regulations, her deadline to take it with an automatic waiver runs to December 31, 2027. After satisfying it, Maria elects to treat the IRA as her own, which simplifies all future RMDs. The result: one withdrawal, no penalty, and a clean rollover into her own account.

Example 2 — The Nguyen Siblings, Multiple Beneficiaries

Lan and Minh Nguyen equally inherit their mother’s IRA after she dies in October 2026 with a $20,000 unsatisfied RMD. The IRS does not require an exact 50/50 split of the final RMD — it only requires that the full $20,000 leave the account. Lan, in a lower tax bracket, agrees to take the entire $20,000 to absorb the income. Minh takes nothing toward the final RMD. The obligation is satisfied because the total came out; the siblings simply chose who reports the income. Both then open separate inherited IRAs for the remaining balance.

Example 3 — David, Who Missed the Old Deadline

David inherits his father’s IRA. His father died in November 2025 with a $15,000 RMD untaken, and David did not learn about the account until February 2026. Under the old rule he would already owe a penalty. Under the 2024 regulations, David has until December 31, 2026 to take the $15,000 with an automatic waiver. He withdraws it in March 2026, reports it on his 2026 return, and owes no excise tax. The new deadline saved him a $3,750 penalty (25% of $15,000).

Multiple Beneficiaries — How the Split Works

When several people are named on the IRA, the final RMD becomes a shared obligation. Per Morningstar’s analysis of the rules, the IRS does not require each beneficiary to take a pro rata share of the year-of-death RMD. The full amount simply needs to come out, and the beneficiaries can decide among themselves who takes how much.

This flexibility is a planning tool. The heirs can let the beneficiary in the lowest tax bracket absorb the income, or one beneficiary can take the entire amount as a lump sum. The consequence of poor coordination is a missed RMD — if everyone assumes someone else took it, no one does. What you should do is agree in writing who takes the final RMD before anyone splits the account into separate inherited IRAs, because once the account is divided the math gets harder to track.

No Designated Beneficiary or Estate as Beneficiary

If the owner named no beneficiary, or named the estate, the IRA flows into the estate. Here the executor (also called the personal representative) becomes responsible for taking the final RMD. The withdrawal is reported on the estate’s income tax return, Form 1041, rather than on an individual’s return.

This is the one case where the estate truly handles the RMD. The consequence is often higher tax, because estates and trusts hit the top federal income tax bracket at very low income levels. A misconception is that naming the estate is “simpler” — it usually costs more in tax and forces the account through probate. What you should do, if you are still planning, is name living individuals as beneficiaries to keep the IRA out of the estate and preserve the cheaper individual tax treatment.

Roth IRAs Are Different

A Roth IRA owner is never required to take RMDs during life, so there is no year-of-death RMD to chase. The owner could die at any age having taken nothing, and no final distribution is owed for the death year. This is a clean break from traditional IRAs.

Beneficiaries of a Roth IRA still face post-death rules — most non-spouse heirs must empty the account within 10 years — but there is no penalty for skipping a year-of-death RMD because none exists. The consequence of confusing the two account types is needless worry or an unnecessary withdrawal. What you should do is confirm the account type with the custodian; if it is a Roth, the year-of-death RMD question simply does not apply.

Federal vs. State Treatment

Start with federal law, then check your state. The federal rule is uniform: the final RMD is the beneficiary’s taxable income for the year it is withdrawn, taxed as ordinary income on their federal return.

States diverge sharply. Most states with an income tax treat the inherited RMD as taxable income, but several states fully or partly exempt retirement-account distributions, and nine states have no broad income tax at all. Never assume your state mirrors the federal rule. What you should do is check your state’s department of revenue guidance on retirement income before you assume the RMD is taxable at the state level.

Tax Question	How It Is Treated
Federal income tax	Final RMD is ordinary income to whoever withdraws it, taxed at their rate
State income tax (most states)	Generally taxable, but exemptions for retirement income vary widely by state
No-income-tax states	Florida, Texas, and seven others impose no state tax on the distribution

Reporting and the Form 5329 Walkthrough

The custodian reports the distribution on Form 1099-R, issued to whoever received the money. The beneficiary then reports it as income on their Form 1040. If everything was taken on time, no further special forms are needed.

If the RMD was missed, you fix it with Form 5329. The penalty for a missed RMD is 25% of the shortfall, reduced to 10% if you correct it within the two-year correction window under SECURE 2.0. The IRS can also waive the penalty entirely for reasonable cause once you take the missed amount. Here is the line-by-line approach used in the Form 5329 instructions:

• Line 52 / 54a: Enter the RMD amount that should have been taken.
• Line 53 / 54b: Enter the amount actually distributed (often $0).
• Line 54: Write “RC” (reasonable cause) and the dollar amount of the shortfall you want waived in parentheses on the dotted line, then enter the result after subtracting the waiver request.
• Line 55: Enter the additional tax due; enter $0 if you are requesting a full waiver.
• Attach a statement explaining why the RMD was missed and confirming you have now taken it.

The consequence of skipping the explanation statement is a denied waiver. Use the correct year’s version of the form, because it changes annually. For the cleanest result, take the missed RMD first, then file Form 5329 with the statement attached.

Deadlines, Timing, and Cost

For deaths in 2025 and 2026, the practical deadline to take the final RMD with an automatic waiver is December 31 of the year after death. Taking the actual distribution from a custodian usually takes a few days to two weeks once the inherited account is set up. Setting up the inherited IRA and submitting paperwork to the custodian can take two to six weeks.

Cost depends on complexity. Handling a single, clear beneficiary situation yourself is free beyond the tax owed on the income. A complicated case — multiple beneficiaries, an estate beneficiary, a trust, or a denied waiver — warrants a CPA or estate attorney, typically costing several hundred to a few thousand dollars. This article is educational and not a substitute for advice from a licensed professional for your specific situation.

Mistakes to Avoid

• Assuming the estate takes the RMD. It does not unless the estate is the named beneficiary; the named beneficiary takes it, and misrouting it can cause double-reporting.
• Believing death cancels the RMD. It does not; the unsatisfied amount is still owed and a miss can trigger the excise tax.
• Using the old year-of-death deadline. For 2025+ deaths the deadline moved to December 31 of the following year, and panicking over the wrong date causes rushed errors.
• Forgetting Roth IRAs have no lifetime RMD. Taking an unnecessary “final RMD” from a Roth creates needless tracking and confusion.
• Calculating with the beneficiary’s age. The final RMD uses the owner’s age and table, so the wrong factor produces a wrong, under-taken amount.
• Splitting the account before taking the RMD. Dividing into separate inherited IRAs first makes it harder to confirm the full RMD came out, risking a shortfall.
• Filing Form 5329 without a statement. Omitting the reasonable-cause explanation gets the waiver denied and leaves the 25% penalty in place.
• Missing the 1099-R income on the return. The recipient must report the distribution, and skipping it invites an IRS notice.

Do’s and Don’ts

Do’s – Do pull the beneficiary designation form first, because it — not the will — controls who takes the money. – Do confirm whether the owner reached the required beginning date, because that decides if a final RMD is even owed. – Do take the missed RMD before filing Form 5329, because the waiver requires you to have remedied the shortfall. – Do coordinate in writing with co-beneficiaries, because an uncoordinated split can leave the RMD unsatisfied. – Do keep the prior-year-end statement, because it proves the balance used in your calculation.

Don’ts – Don’t route the RMD through probate when a beneficiary is named, because it delays the distribution and adds cost. – Don’t assume your state taxes the RMD the same as the federal government, because state rules vary widely. – Don’t wait until December 31 of the death year out of fear, because for 2025+ deaths you have until the following year-end. – Don’t take a “final RMD” from a Roth IRA, because none is required. – Don’t pay the 25% penalty before requesting a waiver, because Form 5329 lets you ask the IRS to waive it first.

Pros and Cons of the New Year-of-Death Rules

Pros – The automatic waiver removes the penalty risk for heirs who could not act in time, because they now get until the next year-end. – The extended deadline gives executors and heirs breathing room to locate accounts, because December deaths no longer create a days-long scramble. – Multiple beneficiaries gain flexibility to assign the income to the lowest-bracket heir, because the IRS does not require a pro rata split. – The 10% reduced penalty rewards prompt correction, because fixing the miss within two years cuts the tax sharply. – Reasonable-cause relief stays available, because a genuine mistake can still be fully forgiven.

Cons – The obligation never disappears, because the waiver removes the penalty but not the required withdrawal. – The income still hits a tax return, because the RMD is taxable to whoever takes it. – Estate-as-beneficiary cases face high trust tax rates, because compressed brackets tax the income heavily. – Tracking gets complex with multiple heirs, because someone must confirm the full amount came out. – Form versions change yearly, because using the wrong year’s Form 5329 can stall a waiver.

What to Do Next

1. Find the IRA’s beneficiary designation form from the custodian to confirm who inherits.
2. Confirm whether the owner had reached the required beginning date and how much RMD, if any, was already taken.
3. Calculate the unsatisfied final RMD using the prior-year-end balance and the owner’s table factor.
4. Have the correct beneficiary withdraw the shortfall before December 31 of the year after death.
5. Report the income on the recipient’s return using the Form 1099-R the custodian issues.
6. If the deadline was missed, file the correct year’s Form 5329 with an “RC” entry and a reasonable-cause statement.
7. Call a CPA or estate attorney if the IRA names a trust or estate, if there are multiple heirs, or if a waiver is denied.

FAQs

Who takes the final RMD when an IRA owner dies? The beneficiary named on the IRA takes it. The estate takes it only if the estate is the named beneficiary or no beneficiary was named. The amount is reported on the recipient’s tax return for the year withdrawn.

Does the executor take the final RMD? No, not usually. A named beneficiary receives the IRA outside probate and takes the final RMD directly. The executor handles it only when the estate itself is the beneficiary, reporting it on Form 1041.

What is the deadline to take the year-of-death RMD? December 31 of the year after death, for deaths in 2025 or later, with an automatic waiver of the penalty. Take the actual withdrawal by that date to stay protected under the 2024 final regulations.

What is the penalty for missing the final RMD? 25% of the missed amount. It drops to 10% if corrected within the two-year window, and the IRS can waive it entirely for reasonable cause once you take the missed RMD and file Form 5329.

Do multiple beneficiaries each have to take a share? No. The full year-of-death RMD must come out, but the IRS does not require a pro rata split. The heirs can decide among themselves who takes how much.

Is the final RMD taxable to the beneficiary? Yes. It is ordinary income to whoever withdraws it, taxed at their federal rate for the year received. State treatment varies, so check your state’s rules.

Does a Roth IRA have a year-of-death RMD? No. Roth IRA owners have no lifetime RMDs, so there is no final-year RMD to take when the owner dies. Post-death distribution rules still apply to heirs.

What if the owner died before the required beginning date? No final-year RMD is owed. Lifetime RMDs had not begun, so there is nothing to finish. The inherited account then follows the 10-year rule or other post-death rules.

How do I calculate the final RMD amount? Divide the prior year-end balance by the owner’s life-expectancy factor. Use the owner’s age and the Uniform Lifetime Table from IRS Publication 590-B, not the beneficiary’s age.

What form fixes a missed RMD? Form 5329. Enter the shortfall, write “RC” with the waiver amount, attach a reasonable-cause statement, and file the correct year’s version after taking the missed distribution.

At what age do RMDs begin in 2026? Age 73 for those born 1951–1959, and age 75 for those born in 1960 or later, under SECURE 2.0. The required beginning date is April 1 of the year after you reach that age.

Can I roll over a deceased spouse’s IRA to avoid issues? Yes, but take the final RMD first. A surviving spouse can treat the IRA as their own after satisfying any year-of-death RMD, which simplifies all future withdrawals.