Inherited IRAs
An RMD may be required for an IRA, retirement plan account or Roth IRA inherited from the original owner. The factors that affect the distribution requirements for inherited retirement plan accounts and IRAs include:
- Whether the account owner died after 2019 (the SECURE Act made changes to the RMDs for beneficiaries if the death of the account holder occurred after 2019).
- The relationship of the beneficiary to the account owner and certain characteristics of the beneficiary (spouse, minor child, disabled or chronically ill individual, entity other than an individual).
- Whether the original account owner passed away before or after their required beginning date (the date the original account owner was required to begin taking RMDs).
IRS Notice 2023-54 provides that certain non-spouse beneficiaries subject to the 10-year distribution rule will not fail the RMD requirements because they didn’t make distributions in 2023.
Retirement Topics - Beneficiary and Required Minimum Distributions for IRA Beneficiaries have information on taking RMDs from an inherited IRA or retirement account and reporting taxable distributions as part of gross income. Publication 559, Survivors, Executors and Administrators, can help those in charge of the estate complete and file federal income tax returns and explains their responsibility to pay any taxes due on behalf of the person who has died.
2020 coronavirus-related distribution
Distribution requirements were waived for 2020 due to the coronavirus pandemic. An account owner or beneficiary who received an RMD in 2020 had the option of returning it to their IRA or other qualified plan to avoid paying taxes on that distribution. A 2020 RMD that qualified as a coronavirus-related distribution could be repaid over a three-year period or have the taxes due on the distribution spread over three years.
A 2020 withdrawal from an inherited IRA could not be repaid to the inherited IRA but may be spread over three years for income inclusion. For more information see Coronavirus Relief for Retirement Plans and IRAs.
Taxpayers can find forms, instructions, publications, Frequently Asked Questions regarding Required Minimum Distributions and other easy-to-use tools at IRS.gov.
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