Inherited IRA Rules: Everything You Need to Know

If you inherit an IRA, you need to know the tax rules.

By Kailey Hagen – Updated Mar 17, 2025 at 2:04 PM

Key Points

Inherited IRAs must be withdrawn within 10 years, taxed at the heir's ordinary rate.
Most non-spouse heirs can no longer spread inherited IRA distributions over their lifetime.
Spreading out withdrawals may lower tax impacts, especially in lower-income years.

IRAs are tax-advantaged retirement accounts that accept pre-tax contributions. With traditional IRAs, account holders pay taxes on withdrawals. Sometimes, people who own IRAs pass away before withdrawing all the money in an account, which means their heirs can inherit it. For those heirs, it may come as a shock to discover that you must pay taxes on an inherited IRA.

Taxes on an inherited IRA are due when the money is withdrawn from the account and taxed at your ordinary income tax rates. Taxes are typically due only on a traditional IRA, not on a Roth IRA (as long as the Roth IRA was open for at least five years).

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Hands of a person looking at a laptop and financial data. — Image source: Getty Images.

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Inherited IRA RMDs

Inherited IRAs still are subject to required minimum distributions (RMDs). Learn the rules here.