How to Calculate RMDs for Inherited IRAs

When RMDs must be calculated, the rules will also differ depending on whether the beneficiary is a spouse or non-spouse.

How Is the Life Expectancy Factor Determined?

Surviving spouse beneficiaries have the option of treating the account as their own. When spouse beneficiaries decide to use their own life expectancy, they locate the correct factor in the Single Life Expectancy Table using their own age each year. When they use their spouse’s age, they locate the original account owner’s age in the year of death in the table for year one. Each subsequent year, they reduce that year-of-death age by one.

When eligible designated beneficiaries are calculating RMDs and the IRA owner died before they started taking RMDs, they can take distributions over their own life expectancy. The life expectancy factor is determined by using the beneficiary’s age in the year after the account owner died and subtracting one in each subsequent year.

For IRA owners who die on or after they started taking their RMDs, beneficiaries use their own life expectancy if they were younger than the account owner. When the account owner was younger at the time of death, beneficiaries use the account owner’s age, starting with the year of death.

Most non-spouse beneficiaries who were taking RMDs from inherited accounts before 2022 must also reset life expectancy factors based on the new IRS tables released in 2022. For example, if the IRA was inherited by non-spouse beneficiaries in 2017, they must use the new tables and determine their life expectancy starting in 2018 (subtracting one for each later year). Only RMD amounts for 2022 and after are affected by this adjustment.

How Do RMD Penalty Waivers Affect the Determination?

The IRS waived penalties for missed or incorrect RMDs for 2020 in response to the COVID-19 pandemic. The agency also waived RMD penalties for inherited accounts in 2021, 2022, 2023 and 2024 due to widespread confusion over the new rules governing RMDs for non-eligible designated beneficiaries subject to RMDs during their 10-year distribution period.

The beneficiaries’ life expectancy factor is not changed when they take advantage of these waivers. In other words, absent further guidance, the life expectancy factor will be based on the individuals’ age when they eventually resume RMDs.

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