IRS provides updated safe harbor 402(f) notices for eligible rollover distributions from qualified retirement plans

The IRS recently issued Notice 2026-13, which provides updated safe harbor explanations that plan administrators may use to satisfy the eligible rollover distribution explanation requirement of Section 402(f) of the Internal Revenue Code (often referred to as the “Special Tax Notice” requirement).

Under Section 402(f) of the Code, at least 30 but no more than 180 days before making an “eligible rollover distribution” from an “eligible retirement plan” to a plan participant, the plan administrator must provide the recipient with an explanation of, essentially, the recipient’s rollover options and the tax implications involved if the recipient elects to do, or not do, a rollover to another eligible tax-qualified plan.

In prior guidance, the IRS provided two model safe harbor explanations that plan administrators could use to satisfy the Code Section 402(f) requirement – one for payments not from a designated Roth account from a designated Roth account and one for payments. These safe harbor explanations occasionally need to be updated to reflect changes in applicable law. The last updates came in Notice 2020-62 and took into account changes under the SECURE Act. Notice 2026-13 further modifies the safe harbor explanations that were set forth in Notice 2020-62 to account for changes made by the SECURE 2.0 Act.

Plan administrators should use the updated safe harbor Special Tax Notices immediately for all eligible rollover distributions going forward.

On a practical note, the prior safe harbor Special Tax Notices outlined in Notice 2020-62 ceased to accurately reflect the applicable law as of August 6, 2020. The law requires the Special Tax Notices to reflect applicable law when given to a recipient accurately, so plan administrators making eligible rollover distributions on and after August 6, 2020, were already required to update the Special Tax Notices to account for changes in applicable law. Accordingly, while the updated Special Tax Notices in Notice 2026-13 are welcomed, the updates should largely reflect language that plan administrators have already been including. To the extent there are future changes in applicable law, plan administrators should update the Special Tax Notice accordingly until new model safe harbor Special Tax Notices are issued by the IRS.