Inherited IRAs in 2026: The 10-Year Rule and What Beneficiaries Need to Know

The old rules vs. the new rules

Before the SECURE Act took effect in 2020, most beneficiaries who inherited an IRA could stretch distributions over their own life expectancy — taking small required minimum distributions each year and allowing the remainder to continue growing tax-deferred. This was known as the "stretch IRA."

The SECURE Act eliminated the stretch IRA for most non-spouse beneficiaries who inherit IRAs from decedents dying after December 31, 2019. In its place: the 10-year rule.

The 10-year rule

Under the 10-year rule, most non-spouse beneficiaries must fully distribute the inherited IRA within 10 years of the original owner's death. There is no requirement to take a specific amount each year — the entire account just needs to be empty by the end of the 10th year.

However, there has been significant confusion — and IRS guidance that changed course multiple times — about whether annual RMDs are required during the 10-year period if the original owner had already begun taking their own RMDs before death.

The annual RMD question

The IRS has clarified that if the original IRA owner died after their required beginning date (meaning they had already started taking RMDs), the beneficiary must take annual distributions during the 10-year period, in addition to fully distributing the account by the end of year 10. If the original owner died before their required beginning date, no annual distributions are required — the beneficiary just needs to empty the account by year 10.

Eligible designated beneficiaries — the exceptions

Certain beneficiaries are exempt from the 10-year rule and can still use the stretch IRA approach. These "eligible designated beneficiaries" include: surviving spouses, minor children of the deceased owner (until they reach the age of majority), disabled individuals, chronically ill individuals, and beneficiaries who are not more than 10 years younger than the deceased owner.

Surviving spouse rules

Surviving spouses have additional options beyond those available to other beneficiaries. They can roll the inherited IRA into their own IRA, treating it as if it were always theirs — which allows them to delay RMDs until their own required beginning date and name new beneficiaries. This is typically the most advantageous option for surviving spouses who don't need immediate access to the funds.

The tax impact

Distributions from inherited traditional IRAs are ordinary income to the beneficiary. Taking large distributions in a single year can push a beneficiary into a significantly higher tax bracket. Planning the timing and amount of distributions over the 10-year period — and considering strategies like Qualified Charitable Distributions where applicable — to spread the income tax impact — is an important part of managing an inherited IRA.

If you received an inherited IRA and are unsure about your distribution requirements or tax obligations, reach out. Getting this wrong can result in significant penalties and missed tax-planning opportunities.