The Internal Revenue Service (IRS) announced final rules on Thursday detailing the amounts that must be pulled out yearly from inherited Individual Retirement Accounts (IRA).

An inherited IRA is opened when someone inherits an IRA plan and assets are moved from the original owner to the beneficiary’s account. Before the SECURE Act 2.0 was passed by Congress in 2022 and signed into law, beneficiaries could withdraw funds from an inherited account at their discretion. But the Act now requires that beneficiaries pull out all funds within 10 years of the original owner’s death.

On July 18, the IRS issued final rules on such withdrawals. The rule is related to the required minimum distributions (RMD), or the minimum amounts that IRA owners have to withdraw from their accounts each year when they reach a certain age.

If the original owner had begun RMDs before their death, the beneficiary of the inherited account will have to continue the withdrawals as well, the IRS stated.

The Treasury and the IRS reviewed public comments arguing against the move. The comments suggested that beneficiaries not be forced into making RMDs yearly. Instead, beneficiaries must be allowed to withdraw the funds as they wish within the-10 year period.

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