Tax rules for people who inherited an individual retirement account can be complex under new regulations.

Nonspouse beneficiaries who inherited an IRA after Jan. 1, 2020, from someone who died must empty their account within 10 years; these people are called noneligible designated beneficiaries. The changes do not apply to those who died before 2020 or spouses, known as eligible designated beneficiaries.

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Based on rules under the Secure Act of 2019, heirs can either take out the money as a lump sum and pay taxes on it or put the funds into a new account either in an IRA or a qualified employer plan.

Heirs will be required to take a required minimum distribution the year after the IRA owner’s death.

RMDs from inherited IRAs were not required due to a temporary suspension in 2021 and 2022, but they were expected to start this year. However, the IRS extended the final ruling on changes to inherited IRA required distributions until 2024. In 2023, those who inherited IRAs are subject to a 25% excess accumulation penalty tax for late payments.

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RMDs can be posted until the year in which the original owner who has passed would have turned 73 years old or Dec. 31 of the year following the year of death.

The IRS initially issued proposed guidance in 2022, and it expects to have the new updates finalized by 2024.