The IRS has issued new regulations affecting taxpayers under the "10-year rule" for required minimum distributions (RMDs) from inherited IRAs or other defined contribution plans. The finalized regulations, effective from 2025, mandate that many beneficiaries must take annual RMDs within the 10 years following the original account holder's death.
The genesis of the new regs dates back to the 2019 enactment of the Setting Every Community Up for Retirement Enhancement (SECURE) Act. One of the many changes in that tax law was the elimination of so-called “stretch IRAs.”
Previously, all beneficiaries of inherited IRAs could stretch RMDs over their entire life expectancies. Younger heirs in particular benefited by taking smaller distributions for decades, deferring taxes while the accounts grew. These heirs also could pass on the IRAs to later generations, deferring the taxes even longer.
Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett (CSH).