# Inherited IRA Rules: 10-Year Clock and 25% Penalty

> Inherited IRAs must be emptied within 10 years or face 25% tax penalty if missed.
- Title: Inherited IRA Rules: 10-Year Clock and 25% Penalty | Shortify
- Summary: Inherited IRAs must be emptied within 10 years or face 25% tax penalty if missed. Nonspouse beneficiaries of IRAs inherited after 2019 must withdraw funds…
- Keywords: ira, secure act, nonspouse beneficiary, required minimum distribution, excise tax, roth ira, tax penalty, inherited retirement account, tax trap, fiduciary advisor, Inherited, Rules
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/09/23/inherit-an-ira-from-a-parent-you-have-10-years-to-empty-it-and-a-25-penalty-if-you-miss-a-withdrawal
- Author: Jake FitzGerald
- Published: 2026-09-23T09:10:47+00:00
- Read time: 1 min
- Topics: ira, secure act, nonspouse beneficiary, required minimum distribution, excise tax, roth ira, tax penalty, inherited retirement account, tax trap, fiduciary advisor
## Inherited IRA Clock Starts
Most adult children inherit a parent's IRA without knowing a decade-long countdown begins when the account owner dies.

> you have 10 years to wipe that account clean
## 10-Year Rule for Nonspouse Beneficiaries
Nonspouse beneficiaries must empty a traditional IRA within 10 years after the owner's death, facing a 25% excise tax if they miss a withdrawal.

> you have 10 years to wipe that account clean
## RMDs Apply if Owner Started Withdrawals
If the parent began required minimum distributions before death, beneficiaries must withdraw annually for 9 years based on their life expectancy.

> you must continue annual RMDs in years one through nine
## 25% Penalty Drops to 10% with Correction
Missing a required distribution triggers a 25% excise tax, which reduces to 10% if corrected within two years by filing Form 5329.

> 25% excise tax on the shortfall
## Roth IRAs Get 10-Year Clock Too
Inherited Roth IRAs also require emptying within 10 years, but beneficiaries should leave the account untouched to grow tax-free until final withdrawal.

> leave the Roth alone for the full 10 years
## Exceptions for Stretch Distributions
Surviving spouses, minor children, disabled individuals, chronically ill people, and beneficiaries under 10 years younger than the decedent can stretch IRA withdrawals over their lifetimes.

> five categories of 'eligible designated beneficiaries'
## Three Steps Before Year 10
Confirm if parent started RMDs, model withdrawals against taxable income, and avoid rolling inherited IRAs into your own unless you're the spouse.

> do not roll an inherited IRA into your own IRA unless you are the spouse
## Tax Trap for Inherited IRAs
Inherited IRAs face nine IRS rules that quietly drain retirement accounts, including the 10-year clock and 25% penalty.

> one of nine IRS rules that quietly drain retirement accounts
## Key takeaway

Nonspouse beneficiaries of IRAs inherited after 2019 must withdraw funds within 10 years or pay 25% excise tax on missed amounts.