I inherited an IRA in 2020. Do I have to take annual RMDs during the 10-year period starting in 2025?

The IRS finalized regulations in 2024 that took effect starting in 2025, and they significantly change how many inherited IRA beneficiaries must handle distributions. If you inherited an IRA from someone who had already started taking Required Minimum Distributions (RMDs), you are now required to take annual RMDs during the 10-year payout period — not just a lump sum by year 10.

### Background: The SECURE Act 10-Year Rule

The original SECURE Act of 2019 eliminated the "stretch IRA" for most non-spouse beneficiaries, replacing it with a mandatory 10-year rule: you must withdraw all assets from the inherited IRA within 10 years of the original owner's death. What wasn't clear was whether annual distributions were required during those 10 years.

### What the 2024 Final Regulations Clarify

The IRS resolved the ambiguity:

• If the original owner had already begun RMDs (i.e., had reached their required beginning date — age 73 under SECURE Act 2.0): Non-spouse beneficiaries must take annual RMDs in years 1–9, then withdraw the remaining balance by December 31 of year 10.
• If the original owner had NOT yet started RMDs: Beneficiaries are not required to take annual distributions, but must empty the account by the end of year 10.

### Your Situation (Inherited in 2020, Owner Had Begun RMDs)

If the original owner was already taking RMDs when they passed in 2020:

• Years 1–4 (2021–2024): The IRS issued repeated waivers, excusing penalties for missed annual RMDs during this transition period.
• Year 5 (2025): The waiver period is OVER. You must take your 2025 RMD from the inherited IRA by December 31, 2025, or face a 25% excise tax penalty on the shortfall (reduced to 10% if corrected within two years).
• Years 6–9 (2026–2029): Annual RMDs continue, calculated based on your life expectancy from IRS Publication 590-B.
• Year 10 (2030): Withdraw the entire remaining balance.

### How to Calculate Your Annual RMD

Use IRS Publication 590-B, Single Life Expectancy Table. Divide the December 31 account balance from the prior year by the life expectancy factor for your age. You must also account for the year your parent/original owner passed.

### Eligible Designated Beneficiaries (Different Rules Apply)

The 10-year rule and annual RMD requirement does NOT apply to eligible designated beneficiaries (EDBs), who may still stretch distributions over their lifetime. EDBs include:

• Surviving spouses
• Minor children of the original owner (until they reach the age of majority)
• Disabled or chronically ill individuals
• Individuals not more than 10 years younger than the original owner

If you are an EDB, you follow the single life expectancy stretch rules, not the 10-year rule.

### Key Takeaway

If you inherited a traditional IRA in 2020 from someone who had already started RMDs, you should have started taking annual RMDs by 2021. The IRS waived penalties through 2024, but 2025 is a real deadline. Consult a tax professional or use IRS Publication 590-B to calculate the amount you owe for 2025 immediately.