Surviving Spouse IRA 2026: Treat as Own vs Inherited, Sec. 327

The routes, and what each one costs

Publication 590-B (2025) lists the spouse’s choices: treat the IRA as your own by designating yourself as owner, treat it as your own by rolling it over, or “Treat yourself as the beneficiary rather than treating the IRA as your own.” Our inherited IRA 10-year rule guide already lists those options for every kind of heir; this page is about the choice itself, because the three routes differ on the two things a spouse feels first: the 10% tax and the start of required distributions.

The reading that matters: the choice is not reversible in the direction people assume. The regulation on the election says how to make it (redesignation, or being deemed to have made it), and we found no provision for turning an own IRA back into an inherited one (our reading). Staying a beneficiary leaves the door open; treating as own closes it.

The trap under 59½

Take a widow, 54 when her husband dies in 2026, with a $600,000 traditional IRA. She expects to need $40,000 a year from 2027 to 2030 and will be 59½ in 2031 (assumed figures).

• Own IRA. Each $40,000 is within 72(t)(1): “10 percent of the portion of such amount which is includible in gross income.” Assuming all of it is taxable, that is $4,000 a year, $16,000 over four years, on top of income tax (our arithmetic).
• Inherited IRA. The same withdrawals fall under 72(t)(2)(A)(ii), so the 10% is $0 whatever her age. Income tax still applies.

Two things make the cheap route fragile. First, the deemed election: a required distribution that is “not distributed within the time period required” makes her the owner at that point, and a contribution to the account (other than a rollover from the decedent’s employer plan) does the same. If the owner died after the required beginning date, the first beneficiary RMD is due by December 31 of the year after death; if the owner died earlier, the spouse’s date can be later (see below). Second, a trust named as beneficiary cannot make the election, so a spouse who is the sole beneficiary of a trust has no own-IRA option under 1.408-8(c)(1)(ii).

A spouse who stays inherited until 59½ and then redesignates keeps both advantages. The regulation does limit the election in one case: once a spouse has reached the applicable age and a catch-up of missed hypothetical RMDs would apply, the election “may not be made in that calendar year” (1.408-8(c)(1)(iii)); the exception in (c)(1)(iv) lets the spouse elect after taking those amounts out. Whether that bites depends on facts a tax professional should check.

Size and start date of the RMD

If the owner died after the required beginning date, the beneficiary route uses the shorter Single Life divisor, and the spouse’s age is re-read every year. Spouse aged 75 in 2027 with $1,000,000 at the end of 2026 (our arithmetic; Table I and Table III from Publication 590-B (2025)):

The difference is $26,918 in the first year. Publication 590-B (2025) says a beneficiary of an owner who died after the required beginning date uses the longer of the Table I figure and the owner’s life expectancy; we assume Table I is longer here. The example also assumes the spouse is not more than 10 years younger than the owner, where Table II applies.

When the owner died before the required beginning date, the delay rule works from the deceased’s birth year, not yours. The delay ends in “the end of the calendar year in which the employee would have attained the applicable age.” The applicable age is 73 for someone who attains 73 before 2033 and 75 for someone who “attains age 74 after December 31, 2032.” Take a husband born in 1964 who dies in 2026. He would have reached 75 in 2039 (our arithmetic).

Source: 26 U.S.C. 401(a)(9)(C)(v); 26 CFR 1.401(a)(9)-3(d). Our arithmetic. Applicable age for the widow: 73 if born 1958, 75 if born 1968. Publication 590-B (2025) examples show age 73 only; the statute sets 75 for later birth years.

An older widow gains time by staying inherited; a younger one gains time by owning. The 10% question above is separate and usually decides it for anyone under 59½. See also how required distributions work with real estate or funds that cannot be sold in our illiquid IRA RMD guide.

What the section 327 election is, and is not

SECURE 2.0 section 327 amended 26 U.S.C. 401(a)(9)(B)(iv). If the surviving spouse elects, “the regulations referred to in clause (iii)(II) shall treat the surviving spouse as if the surviving spouse were the employee,” the start date “shall not be earlier than the date on which the employee would have attained the applicable age,” and if the spouse dies before distributions begin the rules apply “as if the surviving spouse is the employee.” The statute adds that an election “once made may not be revoked except with the consent of the Secretary.”

Three facts from the Federal Register separate the headline from the rules.

• The final regulations did not write the election. The July 19, 2024 final rule (89 FR 58886) says the rules for the election “are reserved in these final regulations and included in a notice of proposed rulemaking (REG-103529-23).” The final text of 26 CFR 1.401(a)(9)-5(g)(3)(i) allows “a defined contribution plan” to “include a provision” for it, and paragraph (g)(3)(ii) reads “[Reserved].” The details are in the separate proposal, 89 FR 58644, not in the final rule.
• The proposal is for plans. The proposed rule would make the election automatic when the employee died before the required beginning date and the spouse is the sole beneficiary, would allow it as a plan default after that date, and would use the Uniform Lifetime Table for the spouse’s age, a longer divisor than Single Life. It also says the spouse “would not be subject to the 10 percent additional tax under section 72(t)(2)(A)(ii)” on a pre-59½ distribution under that election. That protects a spouse who leaves money in a 401(k), 403(b) or governmental 457(b) plan; it does not describe the own-IRA election.
• The proposal says the IRA route is untouched. “The election under section 401(a)(9)(B)(iv) does not affect the ability of the employee’s surviving spouse to make a rollover to the spouse’s own IRA or to treat an IRA as the surviving spouse’s own IRA.” Comments closed September 17, 2024, and the proposal would apply from calendar years beginning on or after January 1, 2025. We searched the Federal Register for a later document on REG-103529-23 and found none, so treat the plan election as proposed; a plan may already offer it under its own terms. Our inherited 401(k) guide covers the plan side.

For an IRA reader, the practical meaning is that there is nothing to elect under section 327. The delay to the owner’s applicable age already applies to a sole-beneficiary spouse under 26 CFR 1.401(a)(9)-3(d), and for a Roth IRA the regulation says that if the sole beneficiary is the surviving spouse, “the surviving spouse may delay distributions until the Roth IRA owner would have attained the applicable age.” A Roth IRA owner has no lifetime RMD (“No minimum distributions are required to be made from a Roth IRA while the owner is alive”), so treating a Roth IRA as your own ends RMDs altogether, while staying a beneficiary does not. Pub. 590-B (2025) describes the Roth choice the same way.

What a reader can do with this

1. Find out who the beneficiary is on the form. Only a sole beneficiary with an unlimited right to withdraw can elect to own it; a trust, a split between spouse and children, or the estate cannot (1.408-8(c)(1)(ii)). If the spouse is not sure they want the account, our qualified disclaimer guide covers the nine-month refusal rule, and our beneficiary designation guide covers who is named.
2. Write down your age on the date of death and the deceased’s birth year. Under 59½ and needing cash: staying inherited costs nothing extra in 10% tax. Over 59½ and not needing cash: the own-IRA divisor is longer.
3. If the owner died before the required beginning date, compute the year the owner would have reached 73 or 75 and the year you reach it. The later year is the start date that suits the route you pick.
4. If you stay inherited, put the December 31 RMD date for each year on the calendar. A missed required distribution turns you into the owner under 1.408-8(c)(2)(i), perhaps when you did not mean to.
5. Before redesignating or rolling over, ask the custodian whether the account holds anything that cannot be moved (a private fund, a note, real estate through a self-directed account) and what moving it requires.
6. For a 401(k) or 403(b), ask the plan whether it offers the spousal election, because the proposed rules leave it to the plan.

FAQ

Sources, read and saved on October 28, 2026: 26 U.S.C. 72, 401 and 408 (Cornell Legal Information Institute); 26 CFR 1.408-8, 1.401(a)(9)-3 and 1.401(a)(9)-5 (eCFR, current text); Required Minimum Distributions, final rule, 89 FR 58886 (July 19, 2024); Required Minimum Distributions, notice of proposed rulemaking REG-103529-23, 89 FR 58644 (July 19, 2024); IRS Publication 590-B (2025). Worked examples are our arithmetic on assumed figures; your plan, state law and tax situation decide the real result. This is analysis of public documents, not investment, legal or tax advice.