What are the new 2026 RMD rules for beneficiaries of inherited traditional and Roth IRAs?
Executive summary
Starting in 2026 the IRS’s finalized guidance shifts how many non‑spouse beneficiaries must take inherited IRA distributions: most non‑eligible designated beneficiaries will be subject to a 10‑year rule but — crucially under the IRS’s final regulations — many of those beneficiaries must take annual RMDs during that 10‑year window rather than wait to withdraw everything at year ten [1] [2]. The IRS also delayed full applicability of certain final RMD regulations until the 2026 distribution year, instructing taxpayers to follow a reasonable, good‑faith interpretation in the interim [3].
1. What changed: annual RMDs now required for many inherited IRAs
After years of ambiguity about the SECURE Act’s 10‑year rule, the IRS issued final regulations clarifying that many beneficiaries who are required to empty an inherited IRA within 10 years must also take annual required minimum distributions (RMDs) during that period — a point emphasized by industry coverage and IRS guidance summarized by Kiplinger and Fidelity [1] [2]. This settles whether you could simply wait until year ten to withdraw everything: for a large subset of beneficiaries the answer is no; annual distributions are required [1].
2. Who this affects: non‑spouse and “eligible” beneficiary distinctions
The new RMD regime primarily changes the rules for designated beneficiaries who are not eligible exceptions (surviving spouses, minors until reaching majority, disabled or chronically ill persons, or those not more than ten years younger than the decedent). The 10‑year rule still applies broadly, but the annual‑RMD requirement applies to many of those who must follow the 10‑year schedule — the IRS and multiple custodians explain these categories affect timing and calculation [4] [2].
3. Timing: why 2026 matters and what to do in 2025
The IRS pushed the effective date for the final regulations to the 2026 distribution year because implementation issues were raised; taxpayers were told to apply reasonable, good‑faith interpretations before the final applicability date [3]. Several custodians and advisers warned beneficiaries that finalized guidance takes effect in 2026 and that many affected beneficiaries will begin annual RMDs in 2025 or 2026 depending on when the account was inherited and whether the decedent had begun their own RMDs [2] [5].
4. Calculation basics: life expectancy tables vs. the 10‑year clock
Where the lifetime‑stretch rules survived for eligible designated beneficiaries, RMDs continue to be calculated using single life‑expectancy factors that decline by 1.0 each year; for example, an illustrative calculation for 2026 reduces a 65‑year‑old’s factor by 1 to produce the year’s divisor [6]. But for many non‑eligible beneficiaries the regime is different: the account must be emptied within 10 years and, per the IRS rulings, annual RMDs may be required during that decade rather than a single lump sum at year ten [1] [6].
5. Roth IRAs: rules apply but tax effects differ
The distribution timing rules the IRS clarified apply to Roth IRAs as well as traditional IRAs — meaning Roth beneficiaries are subject to the 10‑year rule and, where applicable, annual RMDs — but Roth withdrawals generally carry no income tax if qualified; the tax consequence difference does not change the distribution timing requirement itself [7] [8].
6. Practical consequences and planning levers
Industry firms and advisers stress this change increases complexity and planning stakes: beneficiaries may need to take taxable RMDs annually from traditional inherited IRAs, which can accelerate income and tax liability; conversely Roth beneficiaries face timing constraints but not income tax on qualified distributions [1] [8]. Some custodians provide inherited‑IRA RMD calculators and guidance to help beneficiaries determine exact annual amounts based on life‑expectancy tables or the 10‑year schedule [9] [10].
7. Disputes, implementation headaches and remaining uncertainty
Commenters prompted the IRS delay to 2026 because aspects of the proposed rules were hard to implement; advisers call the beneficiary taxonomy “insanely complicated,” and trusts and multiple‑beneficiary situations raise additional work—separate accounts, allocation among beneficiaries, and whether to elect five‑year or other options in older scenarios are among the nitty‑gritty issues [3] [5] [10]. The IRS told taxpayers to act in good faith until the final applicability date, which leaves room for differing practitioner interpretations in 2025 [3].
Limitations: available sources do not mention any changes or congressional overrides after the 2026 applicability guidance; details for every specific beneficiary scenario (multiple beneficiaries splitting accounts, trust beneficiaries, or precise RMD worksheets for 2026) should be verified with custodians, the IRS’s FAQs, or a tax advisor because implementation is technical and facts‑specific [3] [11] [4].