If You Inherited an IRA From Anyone Who Died After 2019 and Was Already Taking RMDs, a Withdrawal Is Due by December 31. The IRS Waived the Penalty for Four Years and Stopped in 2025
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A 54-year-old marketing director inherited her father’s traditional IRA in 2022. He was 80, had been taking required minimum distributions for years, and left her an account worth $480,000 at the end of 2024.
The custodian’s letter said “10 years,” so she let the money compound. For years, the IRS excused heirs in her position who skipped annual withdrawals. That relief ran out, and her December 2025 deadline passed with nothing withdrawn.
She now owes a 25% excise tax on the amount she missed. Her next withdrawal is due by December 31, 2026.
Annual Withdrawals Kick In When the Owner Had Already Started
The SECURE Act rewrote the rules for owners who die in a tax year beginning after December 31, 2019. Most heirs must empty the account by December 31 of the year containing the 10th anniversary of the original account holder’s passing, according to IRS Publication 590-B. The exceptions, called eligible designated beneficiaries, are spouses, minor children, disabled or chronically ill individuals, and anyone not more than 10 years younger than the owner.
Timing determines everything else. If the owner died before the required beginning date, Publication 590-B says “no distribution is required for any year before the 10th year.” If the owner died on or after that date, the heir takes annual RMDs based on the longer of their own single life expectancy or the owner’s remaining life expectancy. The heir also has to meet the 10-year deadline. Both rules run at the same time.
Four Years of Relief Ended With 2025
Proposed regulations confused heirs and custodians, so the IRS granted relief to beneficiaries who skipped these withdrawals from 2021 through 2024. Notice 2023-54 covered 2023. Notice 2024-35 extended relief to 2024 and said the final regulations would apply to calendar years beginning on or after January 1, 2025. Those final regulations were published on July 19, 2024.
Her 2025 Miss Costs $3,604
The daughter turned 51 in 2023, the year after her father died. The IRS Single Life Table gives her a divisor of 35.3, and that divisor drops by one each year. Her father’s life expectancy at 80, the year he died, was 11.2 years, and it drops by one each year after that, to 10.2 in 2023. Hers is longer, so the IRS uses hers.. Hers is longer, so the IRS uses hers.
- 2025 divisor: 33.3
- 2025 RMD: $480,000 divided by 33.3 equals $14,414
- Excise tax at 25%: $3,604
- 2026 RMD: a $510,000 balance on December 31, 2025, divided by 32.3, equals $15,789
If she takes the missed withdrawal and the current one together this year, $30,203 lands on her 2026 return as ordinary income. Whatever is left must be withdrawn by December 31, 2032.
Fixing It Cuts the Bill to $1,441
Section 4974(e) drops the rate to 10% if she takes the missed amount from the same account and files a return reporting the tax within the correction window. That brings the excise down to $1,441. The window closes on the earliest of three dates: when the IRS mails a deficiency notice, when it assesses the tax, or on the last day of the second taxable year after the year of the shortfall.
Section 4974(d) goes further. The IRS can waive the tax entirely if the shortfall came from “reasonable error” and “reasonable steps are being taken to remedy the shortfall.” Her other path was simple: withdraw $14,414 by December 31, 2025, and owe no excise at all.
Moves to Make Before December 31
- Confirm the required beginning date. Ask the custodian whether the owner had started RMDs. The starting age was 70.5 for people born before July 1, 1949, 72 for those born from July 1, 1949, through 1950, and 73 for those born from 1951 through 1959.
- Work out your divisor. Find your age in the year after the death, look up your Single Life Table factor, and compare it with the owner’s remaining life expectancy. Use the longer one.
- Take the 2026 withdrawal now. If you inherited several IRAs from the same person, you can add up the required amounts and take the total “from any one or more of the IRAs.” Inherited 401(k)s are different: each plan pays out separately.
- Correct any 2025 miss. Take the make-up withdrawal, then file Form 5329 for 2025 asking for the reasonable-error waiver, or pay the reduced rate.
- Check Roth inheritances too. RMD rules also apply to beneficiaries of Roth IRAs. A CPA can run your own figures if the account came through a trust.
Remember the 25%. The IRS now charges it on every dollar of a missed inherited-IRA withdrawal, and taking the money out by December 31 avoids it.
Contact [email protected] for any questions or corrections.
Vilma Rios is a tax professional, tax researcher, and financial writer with more than 15 years of experience in tax and accounting. Her work spans federal tax research, financial journalism, retirement planning, investment taxation, capital gains, inherited assets, and tax education. She specializes in translating complex tax and financial topics into clear, practical information that helps individuals, families, retirees, and investors make informed decisions.
She has presented tax information through webinars, including Spanish-language tax education, and has appeared on Telemundo 47 discussing tax topics and helping viewers understand important tax-filing requirements.
Her experience also includes tax and accounting work, tax research, IRS-related matters, and public tax education. While in college, Vilma volunteered in an IRS-sponsored tax assistance program and was recognized for her community service by local and state officials.
Known as "Your Tax Geek," Vilma is passionate about making taxes easier to understand and helping people navigate an increasingly complex tax system.
