Utah · Retirement Income · Estate & Tax Planning · 2026
Inherited IRA Rules in Utah: The 10-Year Rule (2026)
Inherit an IRA and the clock starts: most Utah heirs now have just 10 years to empty it — and some owe a withdrawal every year in between.
The bottom line
- If you inherit an IRA from someone who died after 2019 and you're not a spouse, the 10-year rule usually applies: the account must be emptied by December 31 of the 10th year after death (IRS).
- Under the IRS final regulations for 2025 and later, if the original owner had already started their own RMDs, you must also take an annual withdrawal in years 1–9, not just a year-10 sweep.
- Eligible designated beneficiaries — a surviving spouse, the owner's minor child, a disabled or chronically ill heir, or anyone not more than 10 years younger — can still stretch withdrawals over their life expectancy.
- Miss a required withdrawal and the excise tax is 25% of the shortfall (10% if corrected within two years). Utah also taxes traditional-IRA withdrawals at its flat rate.
- This is education, not tax or legal advice — coordinate with a tax professional before you touch an inherited account.
For decades, a child who inherited a parent's IRA could "stretch" the withdrawals — and the taxes — across their own lifetime. The SECURE Act ended that for most heirs. Now, if you inherit an IRA in Utah from a parent, aunt, or friend who died after December 31, 2019, and you don't fall into a narrow list of exceptions, you generally have to drain the entire account within 10 years. And thanks to the IRS's final regulations, some heirs also owe a required withdrawal every year along the way. Getting the timing wrong can hand a big chunk of the inheritance to the IRS and the Utah State Tax Commission. Here's how the rules actually work in 2026 — with official sources.
What is the 10-year rule?
The 10-year rule comes from the 2019 SECURE Act. For an IRA owner who dies after December 31, 2019, most individual beneficiaries who are not the surviving spouse must withdraw the entire inherited balance by December 31 of the 10th calendar year following the year of death. So if you inherited an account when the owner died in 2026, the account has to be empty by the end of 2036. There is no longer a lifetime "stretch" for these heirs.
Source: IRS, "Required minimum distributions for IRA beneficiaries" — irs.gov/retirement-plans/…ira-beneficiaries.
Sources: IRS RMD FAQs and beneficiary guidance; Utah State Tax Commission. Links in Sources below.
Do I have to withdraw something every year — or just by year 10?
This is the question the IRS final regulations (effective for calendar years beginning on or after January 1, 2025) finally answered, and it trips up a lot of families. It turns on one thing: had the original owner already reached their required beginning date — the point at which their own RMDs had started, at age 73?
- Owner died on or after their RMD start date: a non-eligible beneficiary must take an annual required minimum distribution in years 1 through 9, and still empty the account by the end of year 10. You can't wait and take it all at the end.
- Owner died before RMDs began: there are no annual RMDs — you only have to make sure the account is fully withdrawn by December 31 of year 10. You choose the timing within the window.
The IRS waived the penalty for beneficiary RMDs missed in 2021 through 2024 while these rules were being finalized. Starting in 2025, the annual-RMD requirement is enforced — so 2026 is a year to get the withdrawal on the calendar if it applies to you.
Source: IRS, "Retirement plan and IRA required minimum distributions FAQs" and 2024 final regulations — irs.gov/retirement-plans/…rmd-faqs.
Who is exempt? The "eligible designated beneficiaries"
Congress kept the lifetime stretch alive for a narrow group the IRS calls eligible designated beneficiaries (EDBs). If you fall into one of these categories, you can generally spread withdrawals over your own life expectancy instead of racing a 10-year clock:
| Who inherited | Eligible designated beneficiary? | How the withdrawals work |
|---|---|---|
| Surviving spouse | Yes (most options) | Can roll the IRA into their own IRA, or stay a beneficiary and stretch withdrawals over their own life expectancy. The most flexible category by far. |
| Minor child of the owner | Yes | Life-expectancy RMDs until the child reaches age 21, then the 10-year rule starts — the account must be emptied by about age 31. |
| Disabled or chronically ill person | Yes | May stretch withdrawals over their own life expectancy for life; the 10-year clock does not apply while they qualify. |
| Anyone not more than 10 years younger | Yes | A sibling or partner close in age can stretch over life expectancy — a common exception people miss. |
| Adult child, grandchild, or other heir | No | The 10-year rule: empty the account by Dec 31 of the 10th year after death — plus annual RMDs in years 1–9 if the owner had already started RMDs (died on/after the required beginning date). |
Sources: IRS Publication 590-B, "Distributions from IRAs," and IRS beneficiary guidance. Age of majority is 21 under the final regulations. See a tax professional for your facts.
A note for surviving spouses
A surviving spouse has the most flexibility of any beneficiary. In most cases the simplest move is to roll the inherited IRA into your own IRA, after which it's treated as if it were always yours — your own RMDs don't begin until you turn 73, and you name your own beneficiaries. A spouse can also choose to remain a beneficiary if that starts withdrawals later. Because the stakes are high and the choice is usually irreversible, this is worth a conversation before you sign anything.
Why the timing matters: the year-10 tax trap
The 10-year rule doesn't add a tax — inherited traditional-IRA withdrawals were always ordinary income. What it changes is the compression. Many heirs are in their 50s and 60s, still working, and in their peak earning years. Letting the account ride and pulling it all out in year 10 can stack a five- or six-figure withdrawal on top of a full salary — spiking your federal bracket, adding Utah's flat tax, and even raising your own Medicare IRMAA surcharge two years later if you're near 65.
Spreading the withdrawals across the full 10 years usually keeps each year's income lower and the total tax smaller. Here's the same $200,000 inherited traditional IRA, drawn three different ways:
Illustrative taxable income added in the peak year for a $200,000 inherited traditional IRA (2026). Actual results depend on your other income and bracket. Educational only — not tax advice.
Inherited Roth IRAs work a little differently
A Roth IRA you inherit is also subject to the 10-year rule for non-spouse heirs — but with two friendly twists. First, because a Roth owner never has lifetime RMDs, there are no annual required withdrawals during the 10 years; you just have to empty it by the end of year 10. Second, qualified Roth withdrawals are income-tax-free at both the federal and Utah level. That combination means many heirs deliberately let an inherited Roth compound tax-free for nearly a decade, then withdraw it near the deadline. If leaving a tax-free legacy is your goal, a Roth account is the one your heirs will thank you for.
Source: IRS Publication 590-B, "Distributions from IRAs" — irs.gov/publications/p590b.
How Utah taxes an inherited IRA withdrawal
Utah does not have its own inheritance or estate tax. But money you withdraw from an inherited traditional IRA is ordinary income, taxed federally and by Utah at its flat state income tax rate — 4.5% for 2025, trimmed to 4.45% for the 2026 tax year under recent legislation. Utah's retirement tax credit can offset some of that at modest income levels, though a large withdrawal can raise your income enough to phase it out. Withdrawals from an inherited Roth IRA are generally tax-free in Utah. Because these amounts land on your return, coordinating the timing with the rest of your Utah income is where the real savings are.
Source: Utah State Tax Commission, individual income tax rates — incometax.utah.gov.
We help Utah families map the 10-year rule against the whole picture — brackets, RMDs, Social Security, and Medicare IRMAA — in plain English, with no pressure. We coordinate with your tax professional.
Talk to a planner →Frequently asked questions
Who has to follow the 10-year rule on an inherited IRA?
Most non-spouse beneficiaries of someone who died after December 31, 2019 — for example an adult child or grandchild. Under the SECURE Act, these “non-eligible designated beneficiaries” must withdraw the entire inherited IRA by December 31 of the 10th year after the owner's death. A smaller group of “eligible designated beneficiaries” — a surviving spouse, the owner's minor child, a disabled or chronically ill person, or anyone not more than 10 years younger than the owner — can still spread withdrawals over their own life expectancy.
Do I have to take money out every year, or just by year 10?
It depends on when the original owner died relative to their required beginning date (when their own RMDs started, at age 73). Under the IRS final regulations effective for 2025 and later, if the owner had already begun taking RMDs, a non-eligible beneficiary must take an annual RMD in years 1 through 9 AND empty the account by year 10. If the owner died before RMDs began, there are no annual RMDs — you only have to empty the account by the end of year 10. Either way, spreading withdrawals usually beats one big year-10 lump sum.
What is an eligible designated beneficiary?
It's an IRS category of heir who is exempt from the 10-year rule and may still “stretch” withdrawals over their own life expectancy. It includes the owner's surviving spouse, the owner's minor child (until age 21), a disabled individual, a chronically ill individual, and any beneficiary who is not more than 10 years younger than the owner. Everyone else who is an individual is a non-eligible designated beneficiary and falls under the 10-year rule.
Is an inherited Roth IRA subject to the 10-year rule?
Yes — a non-spouse heir must still empty an inherited Roth IRA within 10 years. But because a Roth owner never has required minimum distributions during life, there are no annual RMDs during the 10 years; you simply have to withdraw everything by the end of year 10. And qualified Roth withdrawals are generally income-tax-free, so many heirs let an inherited Roth grow tax-free and take it all near the deadline.
What's the penalty for missing an inherited-IRA RMD?
The IRS excise tax on an RMD you were required to take but didn't is 25% of the shortfall — reduced to 10% if you correct it within a two-year window and file Form 5329. The IRS waived this penalty for missed beneficiary RMDs from 2021 through 2024 while the rules were being finalized, but annual RMDs under the 10-year rule are enforced starting in 2025.
Does Utah tax money I withdraw from an inherited IRA?
Yes. Withdrawals from an inherited traditional IRA are ordinary income on your federal return and are also taxed by Utah at its flat state income tax rate — 4.5% for 2025, trimmed to 4.45% for the 2026 tax year. Utah's retirement tax credit can offset some state tax at modest income levels. An inherited Roth IRA is generally tax-free at both the federal and Utah level. This is educational, not tax advice — check your own situation with a tax professional.
Sources
- IRS — Required minimum distributions for IRA beneficiaries (10-year rule; eligible designated beneficiaries): irs.gov/retirement-plans/…ira-beneficiaries
- IRS — Retirement plan and IRA RMD FAQs (annual RMDs, 25%/10% excise tax, 2025 enforcement): irs.gov/retirement-plans/…rmd-faqs
- IRS — Publication 590-B, Distributions from IRAs (beneficiary rules; inherited Roth; age of majority): irs.gov/publications/p590b
- IRS — Retirement topics: Beneficiary (SECURE Act 10-year rule and exceptions): irs.gov/retirement-plans/…retirement-topics-beneficiary
- Utah State Tax Commission — Utah individual income tax rates: incometax.utah.gov
About this article. Written by the Utah Retirement Income Data Desk and reviewed by Brian Penner, Retirement income & long-term care planner. Educational only — not financial, tax, or legal advice; inherited-account rules are complex and mistakes can be costly, so talk with a qualified tax professional before making a withdrawal or a beneficiary election. Utah Retirement Income is a licensed independent insurance agency (NPN 16493717) and is not connected with or endorsed by any government agency or the federal Medicare program. Insurance and annuity guarantees are subject to the claims-paying ability of the issuing company; there are no guaranteed investment returns.