Inherited IRA Rules for a Surviving Spouse (2026)

A surviving spouse who is the sole beneficiary of an IRA generally has three choices: treat the IRA as their own, keep it as an inherited IRA, or take a lump sum. Each choice changes when required distributions begin, whether the 10 percent early-withdrawal tax may apply, and how much income tax may be due.

For surviving spouses across Allentown, Bethlehem, and Easton, the inherited IRA decision often arrives alongside many others. This guide explains the federal and Pennsylvania rules as the agencies describe them, pairs each option with its limitation, and lists what to gather before you decide. It is educational, it is not a recommendation about any account, and it does not apply to any one household.

Sources and as-of date: the federal rules below come from the IRS: Publication 590-B, Publication 590-A, Retirement topics: Beneficiary, Required minimum distributions for IRA beneficiaries, Retirement topics: Required minimum distributions, Topic no. 557, and Retirement topics: Death of spouse. Pennsylvania rules come from the Department of Revenue: Personal Income Tax Bulletin 2008-1 and the inheritance tax overview. Each was reviewed November 10, 2026. Rules and plan terms change, so check each page for the current version.

The three options for a spouse

The IRS describes a spouse as having more options than other beneficiaries when the spouse is the sole beneficiary. In Publication 590-B, the IRS describes two ways to make the account yours (name yourself owner, or roll it over) and one way to stay a beneficiary. The IRS also confirms that a beneficiary may take a lump sum at any time. Each has a benefit and a limit:

Treat it as your own. You name yourself the owner or roll the IRA into your own IRA. Benefit: the account is generally handled like your other IRAs, which may allow you to delay required distributions until your own required age and keep one set of rules. Limit: withdrawals before age 59½ may be subject to the 10 percent additional tax unless an exception applies, and the choice may be hard to reverse.
Keep it as an inherited IRA. You remain the beneficiary of the account. Benefit: the IRS lists an exception to the 10 percent additional tax for distributions made to a beneficiary because of the owner's death, so you may be able to draw on the money before 59½. Limit: beneficiary distribution rules apply, and depending on your spouse's age and history, you may have to take distributions sooner than you would on your own IRA.
Take a lump sum. You withdraw all or part of the account. Benefit: you have the cash immediately, and the 10 percent additional tax generally does not apply to a distribution made because of the owner's death. Limit: the IRS says taxable distributions are included in your gross income, so a large withdrawal may be taxed in a single year and the money leaves the tax-deferred account.

Some elections are made by action as well as by form. The IRS says you are considered to have chosen to treat the IRA as your own if you make contributions, including rollover contributions, to the inherited IRA, or if you do not take a required distribution for a year as a beneficiary. That treatment applies only if you are the sole beneficiary and have an unlimited right to withdraw from the account. The IRS also says whether a spouse is the sole beneficiary is determined by September 30 of the year after the year of death, so it helps to confirm the beneficiary record early.

How required distributions differ

Timing is often the biggest practical difference between the options. As of November 10, 2026, the IRS describes it this way:

If you treat the IRA as your own. You figure required distributions as an owner would. The IRS says withdrawals generally must begin at age 73, and the applicable age is later for people born in 1960 or later under SECURE Act 2.0, as our RMD guide explains. The limitation is that if you are already past your required age, required distributions may begin right away.
If you keep it as an inherited IRA and your spouse died after their required beginning date. The IRS table for beneficiaries says a spouse may take distributions over their own life expectancy using the IRS Single Life Expectancy table (Table I in Publication 590-B), or based on the owner's age. The limitation is that distributions generally begin the year after death.
If you keep it as an inherited IRA and your spouse died before their required beginning date. Publication 590-B says a surviving spouse who is the sole beneficiary is generally not required to begin distributions until the end of the year in which the owner would have reached their required beginning age. One example in the publication has a spouse who died at age 65 in 2022 and an owner who would have reached 73 in 2030. The IRS also lists the 10-year rule as an option in some cases. The limitation is that delaying distributions may mean larger taxable amounts later.
The year of death. The IRS says that for the year of the owner's death, the required distribution is any amount the owner had to take and had not yet taken. A required distribution generally cannot be rolled over.
Roth IRAs. The IRS says Roth IRA owners are not required to take withdrawals while alive, but beneficiaries of Roth IRAs are subject to required distribution rules. The limitation is that the choice between owner and beneficiary treatment may change which rules apply, so confirm it with your tax professional.

Because the differences depend on dates and birth years, it can help to ask the custodian to confirm the owner's required beginning date and your own required distribution age before choosing.

If you are younger than 59½

For a younger spouse, the 10 percent additional tax is often the deciding factor, and it points in both directions.

Owner treatment may add a penalty tax. Once the IRA is treated as yours, early-withdrawal rules for your own IRA generally apply, so a distribution before 59½ may carry the 10 percent additional tax unless a listed exception fits, as described in IRS Topic no. 557.
Beneficiary treatment may avoid it. The IRS lists distributions made to a beneficiary or estate on account of the owner's death among the exceptions.
The trade-off. Staying a beneficiary may preserve access before 59½, but required distributions generally begin sooner and are taxable income. If you do not expect to need the money, you may prefer longer deferral. If you might, you may prefer access. Neither is right for everyone.

Some households ask whether they can change from one treatment to the other later. The answer depends on the rules and on how the account was handled, so ask the custodian and your tax professional before taking any step.

Cashing out: how taxes may work

A lump sum is simple, but taxes can be the largest cost. The IRS says beneficiaries of an IRA may take a lump sum at any time and must include taxable distributions in gross income. There is no special flat rate for a spouse, so the tax depends on your total taxable income for the year.

Pre-tax money may be fully taxable. A traditional IRA balance funded with deductible contributions is generally taxed at ordinary income rates when withdrawn.
Large withdrawals may raise your bracket. Taking a lump sum in one year may push part of it into a higher bracket and could affect other income-based items.
Basis and Roth amounts differ. Nondeductible contributions may be partly tax free, and the IRS says withdrawals of contributions from an inherited Roth IRA are tax free, with most earnings also tax free unless the account is under 5 years old.
Spreading withdrawals may help. Smaller distributions across several years may smooth the tax, though that may mean following distribution rules and leaving money in the account.

Your CPA can estimate the federal and state result before any money moves.

Roth conversion of an inherited traditional IRA

Many spouses ask whether an inherited traditional IRA can be converted to a Roth IRA. The answer depends on how the account is held, and any conversion has a tax cost.

What the IRS describes. Publication 590-A says you can withdraw assets from a traditional IRA and reinvest them in a Roth IRA within 60 days. It also says a spouse who inherits a traditional IRA can generally roll it over or make it their own. Conversions are therefore most often discussed after an IRA is treated as the spouse's own.
If the account stays inherited. The IRS says that for an IRA inherited from someone other than a spouse, you cannot roll amounts into or out of the account. Whether a spouse-inherited account kept in beneficiary status can be converted is a question to confirm with the custodian and a tax professional.
The cost. A converted amount is generally included in gross income, and the IRS says conversions made in 2018 or later cannot be recharacterized. A conversion may raise your tax bracket for the year and could affect other income-based items, so some households spread conversions over several years.

Our guide to Roth IRA conversions covers how Roth conversions may fit into a retirement plan.

If the account is a 401(k) or other workplace plan

A workplace plan follows its own document, which can differ from IRA rules. The IRS says many plans require the spouse to be the primary beneficiary unless the spouse gives written consent to someone else. The plan document sets the distribution options, and a spouse may have more options than a non-spouse beneficiary. Contact the plan administrator for the beneficiary record, the available choices, and any deadlines. Our article on managing your retirement plan explains common choices when a plan balance moves.

Pennsylvania income tax and inheritance tax

Pennsylvania treats inherited retirement accounts separately from the federal rules, and the answer can depend on the choice you make.

Income tax on inherited IRA distributions. As of November 10, 2026, Personal Income Tax Bulletin 2008-1 says amounts paid from an inherited IRA to the estate or designated beneficiary after the owner's death are generally excluded from tax. The limitation is that if a surviving spouse elects to treat the IRA as their own, the bulletin says the rules for the spouse's own IRA apply, and those can make early distributions taxable.
Inheritance tax. The Department of Revenue lists a 0 percent inheritance tax rate on transfers to a surviving spouse. The limitation is that a return may still need to be filed, and rates differ for other heirs who may inherit later. Our Pennsylvania inheritance tax guide explains the rules in more detail.
Other Pennsylvania rules. Our guide on whether Pennsylvania taxes retirement income covers how the state treats your own IRA withdrawals.

Federal and state treatment differ, so a CPA can review both before you choose.

What to gather before deciding

You usually do not need to decide right away, though a few dates apply. These items can make a conversation with a tax professional more productive:

The account details. The custodian, account type (traditional or Roth), balance, and how the account is titled.
The beneficiary record. The beneficiary form on file, any contingent beneficiaries, and whether you are the sole beneficiary.
Dates. Your spouse's date of birth and date of death, and whether they had reached their required beginning date.
Required distributions. Whether a required distribution for the year of death has been taken.
Your own facts. Your age, income needs, other accounts, and tax picture.
Other documents. Plan documents for any 401(k) or 403(b), and a recent tax return.
Your professionals. An estate attorney for the legal side and a CPA for tax questions.

Our guide to financial advice for surviving spouses separates what cannot wait from what often can, and our guide to inheritance planning covers how other inherited assets may fit together.

Frequently Asked Questions

Can a surviving spouse treat an inherited IRA as their own?

Often, yes. The IRS says a surviving spouse who is the sole beneficiary and has an unlimited right to withdraw from the IRA may treat it as their own by naming themselves owner or rolling it over into their own IRA. The trade-off is that the account is then generally handled like any other IRA of yours, so the 10 percent additional tax on early withdrawals may apply before age 59½ and required distributions follow your own age. Confirm the details with the custodian and a tax professional.

Can an inherited traditional IRA be converted to a Roth IRA?

It depends on how the account is held. IRS Publication 590-A describes conversions from a traditional IRA, and says a spouse who inherits a traditional IRA can generally roll it over or make it their own. A converted amount is generally included in gross income, so a conversion may raise your tax bill for that year, and the IRS says conversions made in 2018 or later cannot be recharacterized. Whether an account kept in beneficiary status can be converted is a question for the custodian and your tax professional.

Does a 401(k) go to a spouse when the owner dies?

Often it does, but the plan decides. The IRS says many plans require the spouse to be the primary beneficiary unless the spouse gives written consent to someone else. The plan document also sets the distribution options, and the IRS notes a spouse may have more options than a non-spouse beneficiary. Ask the plan administrator for the beneficiary record and the choices available.

How much tax applies if a spouse cashes out an inherited IRA?

There is no flat rate. The IRS says beneficiaries can take a lump sum from an IRA at any time and must include taxable distributions in gross income, so a large withdrawal may be taxed at ordinary income rates and could push part of it into a higher bracket. The 10 percent additional tax is generally not charged on distributions made to a beneficiary because of the owner's death, per Topic no. 557, and Pennsylvania generally does not tax them as income. Roth and pre-tax balances differ, so a tax professional can estimate the result.

Do I have to take required distributions from my spouse's IRA?

It depends on the choice you make and on when your spouse died. If you treat the IRA as your own, required distributions generally follow the rules for your own age. If you keep it as an inherited IRA, the timing depends on whether your spouse had reached their required beginning date, as outlined in IRS guidance for IRA beneficiaries. Any amount your spouse still owed for the year of death may also be due.

Is an inherited IRA from my spouse taxed in Pennsylvania?

The Pennsylvania Department of Revenue says distributions paid to a designated beneficiary after the owner's death are generally excluded from personal income tax, but if a surviving spouse elects to treat the IRA as their own, the rules for the spouse's own IRA apply. The Department lists a 0 percent inheritance tax rate on transfers to a surviving spouse. A return may still need to be filed, so confirm with your estate attorney.

Next Step

If you are weighing these choices, you can schedule a conversation with our team. A first step is usually to list the accounts, the beneficiary forms, and the dates, so a tax professional can compare the options with you. We work alongside your estate attorney and CPA, and any outcome depends on your circumstances. Our estate and legacy planning service describes how beneficiary designations and account titling are coordinated with the rest of a plan.

This article is for general educational purposes only and is not individualized tax, legal, or investment advice. Tax rules change, plan terms vary, and results depend on your individual circumstances. Coordinate with a qualified estate attorney and tax professional about your situation.