Non-Spouse Heirs Now Face Annual IRA Withdrawals Under New IRS Rules

Non-spouse heirs who inherit IRAs must now take annual required minimum distributions in years 1–9 if the decedent had already started RMDs, not just wait to drain the account by year 10. The 2024 IRS guidance creates two paths based on the original owner’s age at death: if the owner began RMDs, the heir must withdraw yearly amounts and zero out the account by year 10; if the owner had not started, the heir can wait until year 10 to take the balance. For a 58-year-old inheriting a $180,000 traditional IRA that had begun RMDs, the first RMD would be roughly $6,700, with average annual withdrawals around $18,000 over a decade; taking a lump sum in year 10 could push much of the money into higher tax brackets. Penalties for missed RMDs were reduced under SECURE 2.0 to 25% (10% if corrected within two years via Form 5329). Tax planning tips include confirming the decedent’s RMD status, projecting yearly taxable income, front-loading withdrawals in lower-income years, and filing corrections promptly if a year is missed.