Can I inherit an IRA? (2026 guidelines)
Yes. You can inherit an IRA if you’re named as a beneficiary or if the IRA agreement’s default beneficiary provisions cause the account to pass to you or to an estate of which you are a beneficiary.
However, the rules for withdrawals, taxes, and required distributions depend on your relationship to the original account owner, the type of IRA you inherit, and current IRS regulations. Knowing how these rules apply can help you avoid unnecessary taxes and costly mistakes.
Whether you’re a surviving spouse or another beneficiary, learning your responsibilities early can make the decisions ahead much clearer. This guide walks you through the steps to take after inheriting an IRA.
Last update August 04, 2026
Written by: Clark Stott
In this article
Who can inherit an IRA?
Individuals, trusts, estates, and charities can inherit an IRA. However, the tax treatment and distribution rules depend on who inherits the account and, in many cases, the beneficiary’s classification under IRS rules.
Common IRA beneficiaries include:
- A surviving spouse
- Children and grandchildren
- Siblings and other relatives
- Friends or other individuals
- Trusts
- Estates
- Charities
In most cases, an IRA passes according to the beneficiary designation on file with the financial institution rather than through a will. A valid beneficiary designation generally determines who inherits the account. If no valid beneficiary is named, the IRA agreement’s default provisions or applicable state law may determine who receives the account.
Your beneficiary category determines which IRS distribution rules apply and what options you’ll have after inheriting the account.
Step-by-step: What should I do after inheriting an IRA?
Start by confirming your beneficiary status and understanding the type of IRA you’ve inherited. These two factors determine the IRS rules that apply to you, including when you must take distributions and what options are available.
If you’ve recently inherited an IRA, these are the first steps to take:
Step 1. Confirm that you’re named on the account. Contact the financial institution that holds the IRA to verify your beneficiary status and begin the transfer process. In most cases, a valid beneficiary designation takes priority over instructions in a will.
Step 2. Find out whether it’s a Traditional IRA or a Roth IRA. Traditional IRA withdrawals are generally taxable, while qualified Roth IRA distributions are generally tax-free if IRS requirements are met. For inherited Roth IRAs, the original owner’s five-year holding period may also affect whether the earnings portion of a withdrawal is taxable.
Step 3. Identify how the IRS classifies you as a beneficiary. Whether you’re a surviving spouse, an eligible designated beneficiary, or another non-spouse beneficiary affects how long you can keep the account and when distributions are required.
Eligible designated beneficiaries:
- A surviving spouse
- The deceased owner’s minor child
- A disabled individual
- A chronically ill individual
- An individual who is not more than 10 years younger than the deceased owner
Note: The special rule for a minor child applies only to the deceased owner’s child. It generally ends when the child reaches the applicable age of majority, after which the remaining account typically becomes subject to the 10-year distribution rule.
Step 4. Avoid taking a distribution before understanding the rules. While you may be able to access the funds immediately, withdrawing more than necessary in one year could increase your taxable income if you’ve inherited a Traditional IRA. Although the 10% early withdrawal penalty generally doesn’t apply, income tax may still be owed.
Step 5. Keep copies of the account records and beneficiary paperwork. Beneficiary designation, death certificate, account statements, and prior-year tax documents. You’ll need this information to complete the transfer, calculate future distributions if required, and accurately report any taxable withdrawals on your tax return.
Do I have to take money out of an inherited IRA?
Yes, in most cases you’ll eventually need to withdraw money from an inherited IRA. However, when you must take distributions depends on your beneficiary status, the type of IRA you inherited, and whether the original owner had already reached their required beginning date.
- If the original owner died before their required beginning date: Beneficiaries subject to the 10-year rule generally have flexibility over when they take distributions, provided the inherited IRA is fully distributed by December 31 of the tenth year following the owner’s death.
- If the original owner died on or after their required beginning date: Many non-spouse beneficiaries must take annual required minimum distributions (RMDs) during the 10 years while also ensuring the account is fully distributed by December 31 of the tenth year. Missing a required RMD may result in an excise tax of up to 25%, which may be reduced if corrected promptly.
The distribution rules also vary by beneficiary, as summarized below.
Inherited IRA distribution rules by beneficiary type
|
Beneficiary |
General distribution rule |
|
Surviving spouse |
May treat the IRA as their own, roll eligible amounts into their own IRA, or keep it as an inherited IRA, depending on their circumstances. |
|
Eligible designated beneficiary |
May qualify to use life expectancy distributions instead of the standard 10-year rule. |
|
Most non-spouse beneficiaries |
Generally subject to the 10-year rule. Annual RMDs may also be required if the original owner died on or after their required beginning date. |
|
Trust or estate |
Trusts and estates follow different IRS distribution rules. A qualifying see-through trust may use the rules for its underlying beneficiaries, while an estate is not a designated beneficiary. |
Do I have to pay taxes on an inherited IRA?
It depends on the type of IRA you inherit.
- Traditional IRA distributions: Generally taxable as ordinary income. However, if the deceased owner made nondeductible contributions, part of the distribution may be tax-free.
- Qualified Roth IRA distributions: Usually tax-free if IRS requirements are met. If the deceased owner’s five-year holding period wasn’t met, the earnings portion of a distribution may still be taxable.
Tax reporting: IRA distributions are generally reported on Form 1040 using the information shown on Form 1099-R.
What are my options after I inherit an IRA?
Your options depend mainly on whether you’re the surviving spouse. A spouse may be able to take ownership of the IRA, while a non-spouse beneficiary generally must keep it as an inherited account.
Here are the most common options after inheriting an IRA:
- Keep the account as an inherited IRA. This is the option most non-spouse beneficiaries use. The account remains in the deceased owner’s name for your benefit, allowing you to take distributions in accordance with the IRS rules that apply to your beneficiary category.
- Treat the IRA as your own (spouses only). If you’re the surviving spouse, you may be able to transfer the inherited IRA into your own IRA. This allows you to manage the account as if it had always belonged to you, including following the rules that apply to your own retirement account.
- Take a lump-sum distribution. You can generally withdraw the entire balance at once. If the distribution is taxable, receiving it all in one year may increase your taxable income.
- Decline the inheritance. In some situations, you may choose to disclaim, or refuse, the inherited IRA. If you make a qualified disclaimer under IRS rules, the account passes as though you had never been named as the beneficiary. This option is sometimes considered as part of broader estate or family tax planning.
Some choices, such as a spousal rollover or qualified disclaimer, may be difficult or impossible to reverse, so confirm the consequences before instructing the custodian.
How is an inherited IRA taxed if I live abroad?
The IRS rules for inherited IRAs generally don’t change simply because you live abroad. However, your country of residence may also tax distributions, so you may need to consider both US and local tax rules.
One area that often catches Americans abroad by surprise is when to take a distribution. The timing that makes sense for US tax purposes may not produce the same result under your country’s tax rules, especially if retirement income is taxed differently where you live.
Because tax treatment varies by country, it’s worth reviewing your local rules before taking a distribution. Doing so can help you avoid unexpected tax consequences and make more informed decisions about when to access the inherited IRA.
Frequently Asked Questions
Can I inherit my parent’s IRA?
Yes. If your parent named you as the beneficiary, you can inherit their IRA. Most adult children are treated as non-spouse beneficiaries, which generally means the inherited IRA is subject to the 10-year distribution rule unless an exception applies.
Can I inherit an IRA if I’m not related to the account owner?
Yes. An IRA doesn’t have to be left to a family member. Friends, unmarried partners, charities, trusts, and other beneficiaries can inherit an IRA if they’re named on the beneficiary designation form. However, charities, trusts, and estates may be subject to different distribution rules than individual beneficiaries.
What happens if there isn’t a beneficiary on the IRA?
If there is no valid named beneficiary, the IRA agreement’s default beneficiary provisions generally determine who inherits the account. Depending on the agreement, it may pass to a surviving spouse or another family member, or become part of the owner’s estate. Different IRS distribution rules may then apply.
Can I combine inherited IRAs?
Sometimes, but only in limited situations. You generally cannot combine an inherited IRA with your own IRA, and inherited IRAs from different deceased owners must remain separate. However, inherited IRAs of the same type from the same deceased owner may be combined if IRS requirements are met.
Can multiple people inherit the same IRA?
Yes. An IRA can have multiple beneficiaries. Each beneficiary generally inherits the percentage specified by the account owner and follows the IRS rules that apply to their share. The inherited IRA may also be divided into separate accounts so each beneficiary’s distribution rules apply individually.
Prefer to talk it through? Schedule your free callback today.
Clark Stott has been with Expat Tax Online since 2015. Being a dual national based in the UK, Clark has unique experience helping US citizens (and Accidental Americans) become tax compliant via the Streamlined Tax Amnesty program. Clark likes to help Americans in the UK keep their tax situations as simple as possible to avoid harsh IRS treatment.
