How to Report an Inherited IRA Distribution (2026)

You inherited an IRA from your father, who died in 2022 at age 74. The custodian sent you a Form 1099-R. You've been assuming you could wait until 2032 to pull everything out in one shot. Your tax software is asking you questions you don't fully understand. And now you're wondering if you've already made a mistake you don't know about. This post walks through how to report an inherited IRA distribution on your 2026 return — and whether you've been taking the right amounts in the right years.

Not for the general public. For the adult child who inherited a traditional IRA from a parent who was already past their Required Beginning Date, is sitting somewhere in the middle of the 10-year window, and needs to understand exactly what goes on a 2026 tax return and why.

What does "reporting" an inherited IRA distribution actually mean?

The custodian issues a Form 1099-R when you take money out of an inherited IRA. Box 7 will show distribution code 4, which signals a death distribution. That code tells the IRS this is an inherited account — not an early withdrawal from your own IRA — so the 10% early withdrawal penalty under IRC § 72(t) does not apply to you as a beneficiary, regardless of your age.

The gross distribution amount flows onto your Form 1040 as ordinary income. For a traditional inherited IRA, the full amount is taxable (assuming the original owner's contributions were pre-tax, which is the case for virtually every garden-variety traditional IRA). It stacks on top of your wages, your business income, everything else — and gets taxed at your marginal rate.

If you want a deeper look at what the codes in Box 7 mean, our breakdown of Form 1099-R Box 7 distribution codes covers each one.

That's the mechanical reporting. The harder question — the one actually tripping people up in 2026 — is whether you took enough out in the first place.

Do I have to take a distribution every year, or can I wait until year 10?

No — if the original owner died after their Required Beginning Date, you cannot wait until year 10. You must take annual distributions in years 1 through 9.

Here's the rule under IRC § 401(a)(9) and the final SECURE Act regulations: if the original IRA owner died after their Required Beginning Date (RBD) — which is April 1 of the year following the year they turned 73 — then as a designated beneficiary, you must take annual distributions during years 1 through 9 of the 10-year window.

Your father died in 2022 at age 74. He was past his RBD. That means you were required to take a distribution in 2023, 2024, and 2025 — and you are required to take one in 2026 as well. The account must be fully liquidated by December 31, 2032.

The IRS issued transition relief (Notice 2024-35) that waived penalties for missed annual RMDs within the 10-year period for 2021 through 2024. That relief has expired. 2026 is a live enforcement year. If you skip your 2026 distribution, the penalty under IRC § 4974 is 25% of the amount you were supposed to take but didn't. That penalty drops to 10% if you catch and correct it in a timely manner, but there is no blanket IRS forgiveness this year.

For a full walkthrough of how the 10-year rule works and when annual RMDs are and aren't required, see our post on the inherited IRA 10-year rule.

How do I calculate the required amount for 2026?

The annual RMD for an inherited IRA is calculated using your single life expectancy factor from IRS Publication 590-B, reduced by one for each year that has passed since the first distribution year. Here's the practical sequence for someone in your situation:

• Your first distribution year was 2023 (the year after the 2022 death).
• Look up your life expectancy factor from the Single Life Expectancy Table using your age in 2023.
• For 2024, subtract 1 from that factor. For 2025, subtract 1 again. For 2026, subtract 1 again.
• Divide the account balance as of December 31 of the prior year by the resulting factor.

That's your 2026 RMD floor. You can always take more — and depending on your bracket situation, there may be good reasons to — but you cannot take less without triggering the penalty.

Use the calculator below to estimate your 2026 inherited IRA RMD before you file.

If you missed 2023 or 2024 distributions and are wondering how to reconcile that, the mechanics of fixing a missed inherited RMD are covered in our post on how to fix a missed inherited IRA RMD.

What forms do I actually file?

Two forms are in play here, and knowing which one does what matters.

Form 1099-R is issued by the custodian. You don't prepare it — you receive it. The gross distribution amount and the taxable amount appear in boxes 1 and 2a. This flows to your Form 1040. If box 2b says "taxable amount not determined," your tax preparer will need to sort out the taxable portion, which for a standard pre-tax traditional IRA is simply the full distribution amount.

Form 5329 is where the penalty — or the penalty exception — lives. If you failed to take the required amount in 2026, you report the shortfall on Form 5329 and pay the 25% excise tax there. If you're requesting a waiver of the penalty (which requires reasonable cause and a corrective distribution), you also use Form 5329 to make that request. You attach a written explanation and enter "RC" and the waiver amount in the appropriate line.

Our post on IRS Form 5329 penalties and exceptions walks through how to file it correctly if you're in a shortfall situation.

One thing that catches people off guard: if you inherited IRAs from the same decedent across multiple accounts, you can aggregate the RMDs across those accounts and satisfy the total from any one of them. But you cannot use your own traditional IRA to satisfy an inherited IRA RMD, and you cannot use an inherited IRA to satisfy your own RMD. These are separate pools under Treas. Reg. § 1.408-8.

What if the inherited IRA is a Roth?

Roth inherited IRAs do not require annual distributions during years 1 through 9 — even if the original owner died after their Required Beginning Date — because the Roth owner's RBD is treated as "never" for RMD purposes. The 10-year rule still applies, meaning the account must be emptied by the end of year 10, but you have full flexibility on timing within that window.

Distributions from an inherited Roth are also generally tax-free, provided the account was held for at least five years. The income does not appear as taxable on your return in most cases.

The full breakdown of inherited Roth reporting and tax treatment is in our post on inherited Roth IRAs and whether you owe taxes.

What's the one scenario that surprises people most?

The 2020 death scenario is the one that causes the most damage. A client inherited an IRA in 2020. The IRS issued relief for 2021, 2022, 2023, and 2024 — no penalty for skipping annual distributions during those years. So they took nothing. The account grew. They felt fine about it.

In 2026, they now have to take an annual distribution calculated as if they had been taking distributions since 2021 — using the 2021 life expectancy factor reduced by five years of reductions. And they need to plan for full liquidation by December 31, 2030. That's four years to drain an account that may have grown substantially during the relief period. Depending on the account size and their income in those years, the tax hit can be significant if they haven't planned ahead.

If you're in that situation and trying to figure out how to spread the remaining distributions intelligently across the years you have left, our post on inherited IRA withdrawal strategy works through the math on how much to take per year.

What if the IRA was left to a trust?

This is a separate problem worth flagging. If the IRA was left to a trust rather than directly to you as an individual, the reporting and tax treatment depend entirely on what kind of trust it is. A "see-through" or conduit trust that passes distributions out to individual beneficiaries annually can qualify for life expectancy treatment in some cases. An accumulation trust that holds the funds inside the trust hits the top 37% federal bracket at approximately $15,650 of taxable income — which means a large inherited IRA distribution sitting inside the wrong trust structure can lose an enormous percentage to taxes very quickly.

If your situation involves a trust, see our post on trusts as IRA beneficiaries before assuming the distribution rules are the same as for an individual.

A few things to confirm before you file

• Did the original owner die before or after their Required Beginning Date? This determines whether annual distributions are required during years 1–9.
• Have you taken the correct amount for 2026 based on your updated life expectancy factor?
• Are you reporting the distribution on the correct lines of your Form 1040, using the 1099-R you received?
• If there was a shortfall in any prior year, have you addressed it — either through a corrective distribution or a Form 5329 waiver request?
• If you inherited from someone who had not yet taken their own RMD for the year of death, did you take that final distribution on their behalf? Under IRC § 401(a)(9) and Treas. Reg. § 1.401(a)(9)-5, the year-of-death RMD still has to be taken — it doesn't disappear.

That last one catches people. If your father died in 2022 and had not yet taken his 2022 RMD before he passed, that distribution was still required. It would have been reportable on his final return (or your return as beneficiary, depending on how it was handled). If it wasn't taken, that's a separate shortfall to address.

For a broader look at the first decisions to make after inheriting an IRA — before you get to the reporting stage — our post on inherited IRA rules and what to do first is a good starting point. And if you're not sure who should be helping you work through this, our post on who to talk to after inheriting an IRA covers what to look for.

The bottom line on 2026 reporting

The IRS relief years are behind us. In 2026, if you inherited a traditional IRA from someone who was already past their Required Beginning Date, you have a mandatory annual distribution to take. The Form 1099-R documents what you took. Form 5329 is where any penalty or penalty waiver lives. The taxable amount hits your ordinary income at your marginal rate.

The reporting itself isn't complicated once you know what you're looking at. What's complicated is figuring out whether you've been taking the right amounts in the right years — and what to do if you haven't. That's where the real work is.

If you want a second set of eyes on your specific situation — the account size, your income, how many years you have left in the window, and whether there's a smarter distribution schedule than the minimum — that's the kind of thing our office works through with clients directly.

Ready to sort out your inherited IRA reporting? Reach out to our team here and we'll take a look at where you stand before you file.