Blog · 15 October 2026

Inherited IRA 10-Year Rule Under the SECURE Act: Annual RMDs After Notice 2024-35 and What US CPA Firms Should Tell Heirs

By Keshav Bansal, CA

The SECURE Act’s inherited IRA 10-year rule was never a free pass to ignore annual withdrawals. Rates Chaser (Austin Brooks, Oct. 7, 2026) flagged the risk: “just wait 10 years” can leave a non-spouse heir short of annual RMDs—and facing a live §4974 excise—now that IRS waivers for 2021–2024 have ended. For US CPA firms, the map is Notice 2024-35, the July 19, 2024 final regulations (T.D. 10001), Publication 590-B and Form 5329. Owner RMDs are a separate project; see required minimum distributions for 2026 and Form 5329.

What the SECURE Act 10-year rule requires

IRC §401(a)(9)(H), added by the SECURE Act for deaths after December 31, 2019, generally replaces the old five-year rule with a ten-year empty-by deadline when there is a designated beneficiary. Publication 590-B states the deadline: beneficiaries subject to the 10-year rule must empty the IRA by December 31 of the year containing the 10th anniversary of the owner’s death (death in 2025 → December 31, 2035).

The life-expectancy “stretch” alternative is limited to an eligible designated beneficiary (EDB): the surviving spouse, the owner’s minor child, a disabled or chronically ill individual, or an individual not more than 10 years younger than the owner (Pub. 590-B; IRC §401(a)(9)(E)(ii)). A designated beneficiary who is not an EDB must follow the 10-year rule whether the owner died before or after the required beginning date (RBD).

Annual RMDs when the owner died on or after the RBD

Emptying by year 10 is not always the only obligation. T.D. 10001 (89 FR 58886, July 19, 2024; applicable for RMD calendar years beginning on or after January 1, 2025) explains that if the employee dies after the RBD, post-death distributions must satisfy both the “at least as rapidly” rule under §401(a)(9)(B)(i) and the 10-year rule under §401(a)(9)(H). For a non-EDB heir that means annual RMDs in years 1–9, then a full distribution by the end of year 10.

Pub. 590-B’s starting point when the owner died on or after the RBD is the longer of the beneficiary’s single life expectancy (Table I) or the owner’s remaining life expectancy, with the applicable denominator reduced by one each later year. Do not shortcut that “longer of” test without checking Pub. 590-B and the custodian worksheet.

If the owner dies before the RBD and the 10-year rule applies, Pub. 590-B says no distribution is required for any year before the 10th year. Optional withdrawals that empty the account by year 10 are still allowed—and often better for brackets than a year-10 lump sum—but annual RMDs are not forced in years 1–9.

Notice 2024-35 ended the transition waivers

Many heirs treated 2021–2024 as soft because the IRS declined to assert §4974 for certain “specified RMDs” while final regulations were pending. Notice 2022-53 covered 2021–2022; Notice 2023-54 extended relief to 2023; Notice 2024-35 (2024-19 I.R.B. 1051) extended it to specified RMDs for 2024 and stated that the final regulations are anticipated to apply for calendar years beginning on or after January 1, 2025. T.D. 10001 matches that date. For 2025 and 2026, the annual-RMD layer (when the decedent died on or after the RBD) is in force.

§4974, Form 5329 and the 25% / 10% rates

IRC §4974(a) imposes a tax equal to 25% of the shortfall for the year. Pub. 590-B and the Instructions for Form 5329 (2025), Part IX, say the same. §4974(e) and those instructions allow a reduced rate of 10% if, during the correction window, the taxpayer (1) receives a distribution of the shortfall from the same plan and (2) submits a return reflecting the tax. The window ends on the earliest of a deficiency-notice mailing, assessment, or the last day of the second taxable year that begins after the end of the taxable year in which the additional tax is imposed. §4974(d) and Form 5329 also allow a reasonable-cause waiver request (attach an explanation; the instructions use an “RC” notation).

Inherited Roth, EDBs, tax character and QCDs

• Inherited Roth IRA. Original Roth owners have no lifetime RMDs and no owner RBD (Pub. 590-B). Non-EDB beneficiaries still face the 10-year empty-by deadline; because there is no owner RBD, the Pub. 590-B “no distribution required before the 10th year” pattern usually applies—so annual RMDs in years 1–9 are not the default—but missing the year-10 clear-out can still trigger §4974 (Pub. 590-B warns that insufficient inherited Roth distributions can produce the 25% excise).
• EDBs may use life-expectancy payments (Table I; −1 each later year), subject to later 10-year triggers when an EDB dies or a minor child reaches majority.
• Character. Taxable inherited traditional IRA amounts are ordinary income. The §72(t) 10% early-distribution tax generally does not apply to distributions made on or after the death of the holder (§72(t)(2)(A)(ii)).
• QCDs. Qualified charitable distributions are an owner-side tool. A surviving spouse who treats an inherited IRA as their own can later use QCD planning; a non-spouse cannot roll the inherited IRA into their own IRA. See our QCD and Form 1099-R Code Y guide.

Checklist for US CPA firms

• Confirm death year (SECURE / §401(a)(9)(H) for deaths after December 31, 2019).
• Classify the beneficiary (EDB vs non-EDB; sole-spouse options; separate shares when multiple beneficiaries matter under Pub. 590-B).
• Compare death date to the decedent’s RBD. On/after RBD → expect annual beneficiary RMDs under T.D. 10001 for 2025+; before RBD + 10-year rule → no annual RMD required before year 10.
• Compute with Pub. 590-B tables (Table I / “longer of” as applicable; reduce by one each subsequent year).
• Respect aggregation limits. Form 5329: a beneficiary may combine only IRAs inherited from the same decedent.
• Audit 2025 withdrawals now. If an annual RMD was required and missed, take the shortfall, evaluate the 10% correction-window path on Form 5329, and document any reasonable-cause request.
• Model spreading vs year-10 lump sums when annual RMDs are not required—planning, not a substitute for a statutory minimum when one applies.

Where Tax Brew fits

Beneficiary RMD calendars, Form 5329 workpapers and custodian balance tie-outs are bookkeeping-heavy. Tax Brew provides bookkeeping, cleanup and tax prep support for US CPA firms—your team keeps client advice, representation and sign-off. See our services, or email info@taxbrewglobal.com.

Sources: IRS Notice 2024-35; T.D. 10001, 89 FR 58886 (July 19, 2024); IRC §401(a)(9); IRC §4974; IRC §72(t); IRS Publication 590-B (2025); Instructions for Form 5329 (2025); IRS Retirement topics – Beneficiary; Austin Brooks, Rates Chaser (Oct. 7, 2026). General information, not tax or legal advice. Apply the statute, regulations and publication tables to your client’s facts.