What are the rules for an inherited IRA?

The current rules generally apply when the account owner died after 2019, and they differ by the type of beneficiary (IRS, 2026).

A surviving spouse who is the sole beneficiary generally has the most choices. They may treat the IRA as their own, or stay on as the beneficiary (IRS Publication 590-B, 2025). Treating it as your own may change when your own required minimum distributions begin. The trade-off is that you then follow the rules for an owner, not a beneficiary.

Anyone else, such as an adult child, a sibling or a friend, cannot treat an inherited IRA as their own. You cannot add money to it or roll money into or out of it, though you may be able to move it by trustee-to-trustee transfer to an inherited IRA kept in the original owner's name (IRS Publication 590-B, 2025).

Some non-spouse beneficiaries are called eligible designated beneficiaries: a minor child of the owner, a disabled or chronically ill person, or someone not more than 10 years younger than the owner. They may be able to take withdrawals over their own life expectancy. Other individuals generally fall under the 10-year rule below. A beneficiary that is not a person, such as an estate, follows different rules (IRS, 2026).

Under the 10-year rule, the account must be fully distributed by December 31 of the year containing the 10th anniversary of the owner's death. For example, if the owner died in 2025, the deadline is December 31, 2035. Any amount left after that date may be subject to an excise tax (IRS Publication 590-B, 2025).

Whether you must also take withdrawals before the deadline depends on when the owner died.

• Owner died before their required beginning date (the date their own RMDs were due to start). No withdrawal is generally required before the 10th year (IRS Publication 590-B, 2025). Waiting may defer tax, but it may also pile the whole balance's income into fewer years.
• Owner died on or after their required beginning date. Yearly withdrawals may also be required in the years before the 10th year, under the final regulations that generally apply starting in 2025 (IRS Internal Revenue Bulletin 2024-33). Spreading withdrawals out may smooth the income, but the yearly amounts are not optional.

The IRS waived the excise tax for certain missed yearly withdrawals in earlier years, through 2024, and said the final regulations apply starting in 2025 (IRS Notice 2024-35). If the person who inherited the account has since died, a successor beneficiary may face a different timeline, so check the specifics before acting.

Taxable distributions from an inherited traditional IRA are included in the beneficiary's gross income (IRS, 2026). Added income in a given year may raise the tax you owe for that year.

It may also reach your Medicare premiums. Medicare generally looks at income from two years back, so a large inherited IRA withdrawal may show up later as a higher premium bracket. We explain how that works in What is IRMAA, and could it raise my Medicare premiums?

Inherited withdrawals can sit alongside your own plans. They may add to the income from your own required withdrawals, which we cover in What is a required minimum distribution (RMD), and when do I have to start? They may also change how a Roth conversion of your own money looks in a given year. See Should I do a Roth conversion in retirement? None of this is right for everyone, and what applies depends on your own numbers.

Do beneficiaries pay taxes on inherited IRAs?

Generally, yes for a traditional IRA. Taxable distributions are included in the beneficiary's gross income (IRS, 2026). An inherited Roth IRA works differently, as described below. What you owe depends on the account type and your own tax situation.

Can I just cash out an inherited IRA?

Beneficiaries of an IRA generally may take a lump sum at any time (IRS, 2026). The trade-off is that a lump sum from a traditional IRA is taxable in the year you take it, which may raise that year's tax bill and, two years later, your Medicare premium bracket.

What happens when you inherit a Roth IRA from a parent?

Inherited Roth IRAs are generally subject to the same distribution rules as inherited traditional IRAs. Most Roth withdrawals are tax-free, but earnings may be taxable if the account is under five years old (IRS, 2026). Roth accounts are generally treated as if the owner died before their required beginning date, so a beneficiary under the 10-year rule generally has no yearly withdrawals before the 10th year (IRS Publication 590-B, 2025).

Beneficiary Review is part of Signature Retirement. We review the beneficiary designations across your accounts and policies and flag anything missing, outdated or inconsistent with your intentions, and with Signature Retirement Continuum it is part of each annual review. RMD Planning looks at how required withdrawals fit with your taxes and Medicare premiums. Both are described on our Financial Planning page.

This is education, not a recommendation for any one household. Inherited IRA rules depend on the type of beneficiary and the type of account, so confirm your situation with a tax professional.

This is analysis, not a promise. Tax-aware planning may involve trade-offs, rules change, and results vary with each person's situation. If you are not sure where you stand, the Retirement Picture Check is a ten-question place to start.

IRS, "Retirement topics: Beneficiary" (irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary). IRS, "Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs)" (irs.gov/publications/p590b). IRS, "Internal Revenue Bulletin 2024-33," final required minimum distribution regulations (irs.gov/irb/2024-33_IRB). IRS, Notice 2024-35 (irs.gov/irb/2024-19_IRB#NOT-2024-35). All were read on November 11, 2026. Tax rules change, so check the current ones on irs.gov before you rely on them.