IRS Offers New Relief for IRA Beneficiaries Subject to the 10-Year Rule

Post-SECURE Act, beneficiaries who inherit retirement accounts must empty those accounts within ten years of the original account owner's death.  Under surprising IRS regulations, the IRS interpreted the rule to require annual RMDs during that ten-year distribution period if the original account owner was already in pay status at the date of their death.  Since the proposed regulations were released, the IRS has provided relief for beneficiaries each year by excusing those RMDs.  Notice 2024-35 once again excuses RMDs in 2024 for beneficiaries of accounts when the original owner died after their required beginning date and the beneficiary inherited the account in 2020, 2021, 2022 or 2023.  The notice only applies to beneficiaries of inherited IRAs.  Taxpayers who are subject to the lifetime RMD rules are still required to take their RMDs from their own accounts during their lifetime.  Notice 2024-35 does, however, indicate that the IRS may be ready to finalize the proposed regulations in the coming months, meaning that beneficiaries of inherited accounts should prepare for enforcement of their post-SECURE Act RMD obligations.  For more information on the 10-year rule, visit Tax Facts Online. Read More: Q 3691.  Note: Q is updated.