How Inherited IRA Owners Should Use the New RMD Tables

August 9, 2025

When you inherit an IRA, the last thing you want to deal with is the complexity brought by tax rules! However, RMD for inherited IRA accounts can be quite confusing, particularly with the new RMD tables for 2025 just released by the IRS.

If you are a beneficiary trying to make sense of the numbers, deadlines, and IRS terminology, you are not the only one.

That said, if you are inheriting from a parent, spouse, or another relative; this guide will help you understand the updated RMD tables IRS rules. This way, you can avoid costly mistakes and make more effective financial decisions.

Navigating 2025 RMD Tables for Inherited IRAs

Starting in 2025, the IRS has implemented changes to how beneficiaries of inherited IRAs calculate required minimum distributions (RMDs). These updates affect the structure of the RMD rules by IRS for 2025 as well as the life expectancy factors that are used in determining your annual withdrawal.

If you have inherited an IRA and the original account holder passed away recently- or perhaps a few years ago- this is the year you must pay close attention.

The biggest takeaway from all this is that the IRS is cracking down on non-compliance. If you miss an RMD, you may face a 25% penalty -though that could drop to 10% if corrected in time. Now that is no small fee for a mistake that may have come from a misunderstanding or lack of understanding for that matter.

So how do you make sense of it all? Let’s start with the rules.

New RMD Rules for Inherited IRAs Explained

The new RMD rules for beneficiaries depend largely on when the original account holder passed away and your relationship to them.

Here is the breakdown for better understanding.

1. The 10-Year Rule (Post-2019 Deaths)

If the account owner died after 2019, most non-spouse beneficiaries must now withdraw the entire account within 10 years. But if the account owner had already begun taking RMDs before death, you must also take annual RMDs in years 1- 9, then fully deplete the account by year 10.

If they passed before reaching their RMD age (currently 73), you can technically wait until year 10 to withdraw- but beware of the tax implications.

2. Spouse Beneficiaries Have Options

As a spouse, you are in a rather unique situation. You have the following options.

Transfer the IRA into your own and defer RMDs until you reach the required age.
Keep it as an inherited IRA and take RMDs based on either your life expectancy or your spouse’s remaining life expectancy.

3. Eligible Designated Beneficiaries (EDBs)

You might qualify for the old stretch IRA rules too. This implies that you can take distributions over your life expectancy if you are:

A spouse
A minor child of the deceased (until you turn 21)
Disabled or chronically ill
Less than 10 years younger than the original account holder

For everyone else, the 10-year rule would be applicable.

How to Use Updated RMD Tables for Inherited IRAs

Now that you know Inherited IRA RMD rules for 2025, here is how to calculate RMD inherited IRA values using the new RMD tables for 2025.

Step-by-Step Guide:

Find the applicable IRS RMD table

For most non-spouse beneficiaries, use the Single Life Expectancy Table in IRS Pub. 590-B.
Spouses who treat the IRA as their own can use the Uniform Lifetime Table.

Identify the age

Use the age you will be at the end of 2025 to find your corresponding life expectancy factor.

Determine the account balance

Use the December 31, 2024 balance of the inherited IRA.

Divide the balance by your life expectancy

That gives you the RMD for 2025.

For instance, if your inherited IRA is worth $400,000 and your life expectancy factor from the new RMD tables for 2025 is 22.0, your RMD would be: $400,000 ÷ 22.0 = $18,181.82

Even if you fall under the 10-year rule, and annual RMDs are required, this calculation helps you spread distributions to avoid huge tax hits.

Inherited IRAs: Understanding the New RMD Tables

A common misconception is that inherited IRA rules are the same for everyone. However, in reality, everything depends on three factors!

Your relationship to the original owner

Spouses have more flexibility.
Non-spouse individual beneficiaries must stick closely to the IRS’s prescribed withdrawal schedule.

Whether the owner had started RMDs

If the owner died after their RMD start date, you usually have to take annual RMDs, even under the 10-year rule.

Your beneficiary status

Are you an eligible designated beneficiary? Or just a designated beneficiary? Your classification will determine how and when you take distributions.

It is also worth mentioning that RMDs are taxed as ordinary income. Managing the timing of your withdrawals is as much about tax strategy as it is about compliance.

RMD Guide for Inherited IRA Owners in 2025

So, what would be your next move?

Know your deadlines- You must begin RMDs by December 31 of the year after the account owner’s death- if RMDs are required annually. If subject to the 10-year rule with no annual RMDs, you must empty the account by the end of year 10.
Avoid penalties- if you miss an RMD, file Form 5329 to request penalty relief. If corrected in a timely manner, your penalty may be reduced to 10%.
Coordinate with your tax strategy- Do not make the mistake of deferring withdrawals until year 10, unless you are confident it will not push you into a higher tax bracket. Splitting distributions over several years is usually the more tax-efficient route.
Consult a professional– Even the most seasoned investors may get overwhelmed by the complexity of the RMD rules by the IRS for 2025. A financial planner or CPA can help bring your withdrawals in line with your long-term goals and reduce your tax burden.

Final Thoughts

Dealing with an inherited IRA comes with emotional and financial weight! The new RMD rules for beneficiaries and the updated RMD tables by the IRS make 2025 a vital year to get it right.

That said, if you have inherited an IRA, do not just guess your way through. Take some time, use the resources available, and plan ahead. When you understand how to calculate RMD for inherited IRA values and manage to execute those withdrawals properly, it will help protect your inheritance, reduce taxes, and avoid IRS penalties.

To sum it all up! Know the rules. Use the tables. And do not leave your legacy to chance!