Beneficiaries who inherited an IRA after 2019 entered 2026 facing a rule the IRS had quietly postponed for four years in a row: annual required minimum distributions during the 10-year payout window are now mandatory for many of them. The agency's 2024 final regulations ended the temporary waivers, and the first hard enforcement year is here.
The 10-Year Rule, Briefly
Under the SECURE Act, most non-spouse beneficiaries who inherit a traditional IRA from someone who died after December 31, 2019 must empty the account by the end of the tenth year following the death. The asset can no longer be "stretched" across the beneficiary's lifetime — a planning tool that disappeared with the law.
What stayed unsettled until recently was whether beneficiaries also had to take an RMD each year inside that 10-year window, or whether they could wait until year ten and take it all at once. The IRS final regulations, issued in 2024, drew the line clearly.
Two Paths Based on the Original Owner's Age
The annual-RMD requirement now depends on whether the original IRA owner had already reached their Required Beginning Date (RBD) for RMDs when they died:
- If the owner had already started RMDs: the beneficiary must take an annual RMD in years one through nine and empty the account in year ten.
- If the owner died before their RBD: the beneficiary can skip annual RMDs entirely and simply drain the account by the end of year ten, in whatever pattern they choose.
The RBD is generally April 1 of the year after the owner turns 73 under current law. That date matters enormously: it determines whether your inheritance comes with a yearly tax bill or flexibility to time withdrawals strategically.
The Penalty for Missing One
The excise tax for a missed RMD is 25% of the shortfall, reduced to 10% if the beneficiary corrects the mistake within two years by taking the distribution and filing Form 5329. That is a steep cost for a paperwork oversight, particularly for beneficiaries who assumed the rule was still on pause.
Who Is Exempt: Eligible Designated Beneficiaries
The 10-year rule does not apply to every heir. Eligible Designated Beneficiaries (EDBs) can still use lifetime stretch distributions and include:
- A surviving spouse
- A minor child of the decedent, until age 21
- A disabled or chronically ill individual
- Anyone not more than 10 years younger than the decedent
For these beneficiaries, the rules are unchanged. For everyone else — most adult children inheriting from a parent — the 10-year clock and, often, the annual RMD now apply.
Practical Takeaways
- Confirm the decedent's age at death. If the IRA owner was past their RBD, you almost certainly owe an annual RMD for 2026. If they died before reaching RBD, you have more flexibility.
- Do not aim only for year ten. Even when annual RMDs are not required, lumping the full balance into a single tax year can push you into a higher bracket. Spreading withdrawals usually produces a better after-tax result.
- Coordinate with high-earning years. If you expect lower income in a particular year — a sabbatical, a retirement, a job change — front-loading withdrawals then can save meaningful tax.
- Watch the Roth side. Inherited Roth IRAs still fall under the 10-year emptying rule, but distributions remain tax-free. Waiting until year ten often makes sense for Roths in a way it rarely does for traditional accounts.
- Get the custodian's paperwork right. Inherited IRAs must be retitled in a specific format; mistakes here can accidentally trigger a full taxable distribution.
For beneficiaries who have been waiting out the IRS pause, 2026 is the year the calculator comes out. A short conversation with a tax advisor before year-end is far cheaper than a 25% excise tax.
Sources: Internal Revenue Service, Vanguard, Fidelity, AARP, Bivens & Associates