Inherited Roth IRA rules: the 10-year clock with no annual RMDs

Why an inherited Roth has no annual RMDs

For a traditional IRA, the post-death rules split on whether the owner died before or after their required beginning date (RBD). If after, a 10-year beneficiary also owes annual RMDs; if before, there is only the deadline. The general framework is in the inherited IRA RMD rules guide.

A Roth IRA owner is never required to take distributions while alive, so the question has a fixed answer. The Roth regulations say the minimum distribution rules apply "as though the Roth IRA owner died before his or her required beginning date" (26 CFR §1.408A-6, Q&A-14), and the July 2024 IRA regulations repeat the point (§1.408-8(b)(1)(ii)). It does not matter whether the owner died at 45 or 95. The death-before-RBD rules in §1.401(a)(9)-3 then govern every inherited Roth IRA. Two consequences follow:

• No year-of-death RMD. The owner had no RMD for the year they died, so there is nothing to catch up before December 31.
• No annual RMDs on the 10-year rule. The "annual RMDs in years one through nine" requirement that caught many traditional-IRA heirs applies only when the owner died on or after the RBD. It never applies to a Roth. That is also why the IRS penalty relief of 2021–2024 for missed 10-year-rule RMDs was never relevant to inherited Roth accounts.

An inherited Roth 401(k) is treated the same way (§1.401(a)(9)-3(a)(2)).

The rules by beneficiary type

Find the row that describes you at the date of the owner's death. Eligible-designated-beneficiary status is tested on that date and does not improve later.

The 10-year rule for non-spouse beneficiaries

If you are a designated beneficiary but not an eligible designated beneficiary — the position of most adult children — the account must be fully distributed by the end of the calendar year that includes the tenth anniversary of the owner's death (§1.401(a)(9)-3(c)(3)). The regulation's own example: an owner who died on any day in 2021 has a deadline at the end of 2031. For a death in 2026, the deadline is December 31, 2036.

Inside that window no amount is required in any year: take nothing for nine years and everything in the tenth, or any pattern you like. Your age is irrelevant, and there is no early-withdrawal penalty — distributions after the owner's death are exempt from the 10% additional tax under IRC §72(t)(2)(A)(ii).

Surviving spouses: treat it as your own, or not

A surviving spouse who is the sole beneficiary has the widest choices. The most common is to treat the Roth IRA as their own, or roll it into an existing Roth IRA of their own. From then on it is simply the spouse's Roth: no RMDs during their lifetime, and on the spouse's death the children inherit it with a fresh 10-year window measured from that later death.

The catch is age. Once the account is the spouse's own, the death exception to the 10% penalty no longer applies, so a spouse under 59½ who withdraws earnings early may owe tax and penalty on them. Contributions still come out first and tax-free.

A younger spouse can therefore keep the account as an inherited Roth for now. As sole beneficiary, the spouse may delay life-expectancy distributions until the end of the year the owner would have reached the applicable age, currently 73 (§1.401(a)(9)-3(d)), and can still treat the account as their own later. For the owner's side of this decision, see what happens to your 401(k) when you die; for converting a traditional IRA a spouse has inherited, see can you convert an inherited IRA to a Roth.

Eligible designated beneficiaries and minor children

Besides the spouse, the eligible designated beneficiary (EDB) categories are the owner's minor child, a disabled or chronically ill individual, and anyone not more than 10 years younger than the owner (§1.401(a)(9)-4(e)). Status is fixed at the owner's death. For employer plans, disability or chronic illness must be documented to the plan by October 31 of the year after death; for IRAs the regulations waive that filing (§1.408-8(b)(4)), but keep the evidence in case the IRS asks.

Where the account documents do not specify otherwise, an EDB defaults to the life-expectancy rule: annual distributions beginning by December 31 of the year after death, using the beneficiary's single life expectancy in that year and reducing it by one each year (§1.401(a)(9)-3(c)(5)(i)(C)). Many IRA custodians also let an EDB elect the 10-year rule instead. For a Roth, the life-expectancy option is less about spreading tax and more about keeping a tax-free account open for decades. The annual figures can be run in the inherited IRA RMD calculator; the arithmetic is identical for a Roth.

Minor children. Only the owner's own child qualifies; a grandchild does not. Under the final regulations a child reaches majority on their 21st birthday (§1.401(a)(9)-4(e)(3)). Until then the child takes life-expectancy payments. At 21 the 10-year rule starts, and the account must be emptied by December 31 of the year containing the tenth anniversary of that birthday. The regulations' example: a child reaching majority in 2024 must have the account fully distributed by the end of 2034. The life-expectancy payments already underway generally continue during those ten years; confirm the schedule with the custodian.

Trusts, estates and charities as beneficiaries

A trust that meets the see-through requirements is looked through to its beneficiaries, and the usual result for a family trust is the 10-year rule with no annual RMDs. A trust for a disabled or chronically ill beneficiary can qualify to use life expectancy. The Roth changes the usual trust calculus: qualified distributions are tax-free to the trust, so an accumulation trust can retain them without paying compressed trust tax rates on the distribution itself — only later earnings on retained cash are taxed. A conduit trust on the 10-year rule may receive nothing until year ten and then must pass everything out. The trade-offs are covered in putting a 401(k) or IRA in a trust and trusteed IRA vs trust as beneficiary.

If there is no designated beneficiary — the estate, a charity, or a trust that fails the see-through rules — the five-year rule applies: the account must be emptied by the end of the calendar year containing the fifth anniversary of death (§1.401(a)(9)-3(c)(2)). For a Roth, this is the worst outcome on the table, and it usually happens because a beneficiary form was never filed.

Is it taxable? The owner's five-year clock

A distribution from an inherited Roth is qualified, and entirely tax-free, if it is made after death and after the five-tax-year period has run. That period starts on January 1 of the year the owner first contributed to any Roth IRA, and it is not restarted at death: the period the account is held by a beneficiary "includes the period it was held by the decedent" (§1.408A-6, Q&A-7). How that clock is counted is explained in the Roth IRA five-year rule. A beneficiary's own Roth IRAs run on a separate clock and do not shorten the inherited one; only a spouse who treats the account as their own gets the earlier of the two.

If the owner's clock has not run, the ordering rules still protect you. Every Roth distribution is deemed to come first from regular contributions, then from conversions (oldest first), and only then from earnings (§1.408A-6, Q&A-8). Contributions and conversions are always tax-free to a beneficiary, and the 10% penalty does not apply after death; only earnings withdrawn before the clock runs are taxable, as ordinary income. Gather the owner's Forms 5498 and 8606 — the custodian may not have the full history.

In practice the clock rarely bites a 10-year beneficiary. An owner who first funded a Roth for 2025 and died in 2026 has a clock that runs on January 1, 2030, well inside a window that closes in 2036.

Why waiting until year ten is usually right

With a traditional inherited IRA, waiting until year ten is usually a mistake: the whole balance lands as ordinary income in one year, often in a top bracket. An inherited Roth reverses that logic. A qualified $700,000 distribution in year ten produces no taxable income, so there is no bracket to manage. Inside the account growth is sheltered; once withdrawn, future growth is taxed in an ordinary brokerage account. All else equal, the longer it stays in, the more tax-free growth you keep.

That makes the inherited Roth the one inherited account where the default is to leave it alone. Use any spare cash flow to fill your own Roth or to convert your own pre-tax savings instead, and let the inherited account compound. The Roth conversion calculator shows what that bracket room is worth.

The risks of waiting

• Concentration and sequence risk. A forced full liquidation on a fixed date means you sell at whatever the market offers that December. If the account is concentrated in equities and year ten brings a downturn, the loss is locked in. Consider de-risking gradually in years seven through nine, or taking some out early when markets are strong.
• Legislative risk. The 10-year rule arrived in 2020 with little warning, and Congress has periodically considered further limits on large retirement accounts. We are not aware of a pending proposal that would shorten an existing inherited Roth window, but waiting assumes today's law holds.
• Liquidity. If you need the money for a home, tuition or a business, withdrawing it tax-free beats borrowing to preserve the shelter.
• The deadline itself. A plan that depends on one transaction in one December needs a calendar reminder and a custodian who executes on time.

Titling, transfers and the missed-deadline excise

Move the money only by trustee-to-trustee transfer into an account titled as inherited, typically "Ruth Hale, deceased, Roth IRA FBO David Hale, beneficiary." A non-spouse beneficiary cannot use a 60-day rollover, and you cannot contribute to an inherited Roth or combine it with your own Roth IRA. Where there are several beneficiaries, splitting into separate inherited accounts by December 31 of the year after death lets each person use their own status. Name your own beneficiary on the new account straight away; if you die before it is empty, your heirs inherit under the successor beneficiary rules, with what remains of your window.

If the account is not empty by the deadline, the balance left over is a missed required distribution. The excise tax under IRC §4974 is 25% of the shortfall, reduced to 10% if corrected within the correction window. Because the shortfall is the entire remaining balance, a missed deadline can turn a tax-free inheritance into a large bill. If it happens, withdraw the balance immediately and file Form 5329 with a reasonable-cause waiver request. IRS Publication 590-B is the primary reference; custodians are not required to track your deadline.