On January 15, 2026, the Internal Revenue Service (IRS) issued Notice 2026-13, which revises the safe harbor explanations that may be used to satisfy the special tax notice requirement under Internal Revenue Code (Code) § 402(f) for eligible rollover distributions. By way of background, plan administrators are required to furnish distributees with a written explanation of the general rollover rules for eligible rollover distributions. Code § 402(f) outlines the contents of the written explanation that must be provided to recipients of distributions eligible for rollover treatment (See also Treas. Reg. § 1.402(f)-1, Q&A-1). This explanation is commonly referred to as a “Safe Harbor Notice” or a “Special Tax Notice.”
Notice 2026-13 implements the United States Government Accountability Office’s recommendation to provide clearer and more concise information to allow recipients to fully consider the implications of their distribution options prior to making a decision, and also reflects certain statutory changes made after August 6, 2020. These updates take into consideration certain changes made by the Setting Every Community Up for Retirement Enhancement Act 2.0 (SECURE 2.0). For further background on these changes, please see our previous overview of the SECURE 2.0 changes and SECURE 2.0 Desk Reference.
The IRS and Treasury Department encourage plans to customize a safe harbor explanation by omitting any information that does not apply to the plan. This article highlights the changes that qualified governmental plans should consider making to their Special Tax Notices.
Applicable ages for required minimum distributions
Previously, the Special Tax Notice had been revised to reflect the increase to the applicable age at which distributions must begin – from age 70 ½ to age 72. Notice 2026-13 further modifies the safe harbor explanations by removing specific age references altogether.
SECURE 2.0 built upon the earlier increases to the required beginning date age for RMDs in SECURE 1.0 and established the following applicable ages:
- 70 ½ for individuals born before July 1, 1949
- 72 for individuals born on or after July 1, 1949, and before January 1, 1951
- 73 for individuals born on or after January 1, 1951, and before January 1, 1959
- 73 for individuals born during 1959 (proposed regulations)
- 75 for individuals born on or after January 1, 1960
However, a plan may optionally apply a uniform required beginning date of April 1 of the calendar year following the year in which the employee reaches age 70 ½, regardless of the employee's date of birth.
Because an RMD is not an eligible rollover distribution, it is important for payees to know their required beginning date to determine whether a particular distribution (or a portion of such distribution) is eligible for rollover treatment.
New or expanded exceptions to the 10 percent additional tax under Code § 72(t)(1)
Code § 72(t) imposes an additional 10 percent tax on certain early distributions paid to members in qualified plans. This tax applies in addition to ordinary income tax or any other applicable taxes on the distributed amount. Code § 72(t) also provides several exceptions to this 10 percent premature distribution tax. The Special Tax Notice explains to a payee that if they are under age 59 ½, they will owe an additional 10 percent tax on any amount that is not rolled over, unless an exception applies.
Notice 2026-13 updates the list of exceptions to reflect new provisions added by SECURE 2.0, revises the description of the 10 percent additional tax for clarity, and removes obsolete COVID-19-related distribution provisions.
SECURE 2.0 both modified existing exceptions and created new exceptions under Code § 72(t)(1) for certain distributions. A plan does not have to permit distributions on these bases in order for an individual to qualify for the exception to the 10 percent additional tax on an otherwise available distribution that meets the relevant requirements. There are specific rules that apply to each of these exceptions, but they generally include the following:
- Expanded exception for qualified public safety employees: SECURE 2.0 broadens the exception for qualified public safety employees who separate from service on or after the age of 50 in two ways:
- The exception also applies if the individual has at least 25 years of service under the plan, regardless of the employee’s age; and
- Qualified public safety employees include governmental corrections officers and forensic security employees (as well as private-sector firefighters).
- Emergency personal expense distributions: These distributions from defined contribution plans may be made for purposes of meeting unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses.
- Distributions to domestic abuse victims: These distributions from defined contribution plans must be made within the one-year period beginning on any date the individual is a victim of domestic abuse by a spouse or domestic partner.
- Terminal illness distributions: Available to an individual certified by a physician as having an illness or physical condition reasonably expected to result in death within 84 months of the certification date.
- Qualified disaster recovery distributions: Up to an aggregate amount of $22,000 may be distributed if made within 180 days after the first day of the incident period for a qualified disaster, if the individual's principal place of residence is within the qualified disaster area and the individual sustained economic loss due to the qualified disaster.
- Qualified long-term care distributions: Defined contribution plans may allow distributions to pay premiums for certain long-term care insurance contracts for the employee or the employee's spouse (or other family member as provided by regulation).
It is important to note that, although these new categories are exempt from the 10 percent additional tax imposed by Code § 72(t), many of them do not qualify as eligible rollover distributions if the distribution was made under a plan provision allowing the specific type of distribution (for example, an emergency personal expense distribution). In those situations, the distribution is not subject to the Special Tax Notice requirements and is not subject to mandatory 20 percent federal income tax withholding.
However, if the plan does not expressly permit that distribution type, but the distribution is permitted under another otherwise distributable event, such as termination from employment, the plan would not know whether the individual is eligible for or claiming the exception to the 10 percent penalty. As a result, the plan must still provide the Special Tax Notice and apply the mandatory 20 percent withholding if the amount is not directly rolled over.
Surviving spouse distribution rules
Notice 2026-13 confirms a surviving spouse, who is the sole designated beneficiary (when the employee dies before the employee’s required beginning date) has the right to delay distributions until the year in which the deceased employee would have reached the applicable age for purposes of the RMD rules.
Notice 2026-13 makes minor updates to the safe harbor explanations for surviving spouses.
Required minimum distributions not required from designated Roth account in a plan for participants
To align the rules for designated Roth accounts with the treatment of Roth IRAs, SECURE 2.0 eliminates the requirement that lifetime RMDs be taken from designated Roth accounts under a 401(k), 403(b), or governmental 457(b) plan for participants. As a result, retired participants seeking to minimize RMDs no longer need to roll over designated Roth accounts to an outside Roth IRA solely to avoid lifetime distributions from those accounts.
Notice 2026-13 revises the safe harbor explanations to reflect the elimination of lifetime RMDs from designated Roth accounts.
Mandatory distributions
SECURE 2.0 increased the threshold for mandatory cash-outs of small account balances for terminated participants from $5,000 to $7,000. For accounts exceeding $1,000, plans continue to be required to roll the amount into a default IRA if the participant does not make an affirmative election.
Notice 2026-13 modifies the safe harbor explanations to reflect the increased dollar threshold for mandatory cash-outs.
Distributions from governmental plans to eligible retired public safety officers for health and long-term care insurance
Previously, up to $3,000 of distributions from a governmental retirement plan to a public safety officer to pay for health insurance premiums could be excluded from gross income if the plan made the payment directly to the insurance company or self-insured plan. SECURE 2.0 repealed the direct-payment requirement and now allows eligible public safety officers to make the premium payments directly themselves.
Notice 2026-13 updates the safe harbor explanations to incorporate this change.
Additional information
As mentioned above, the IRS and the Treasury Department encourage plans to customize their safe harbor explanations by omitting any information that does not apply to the plan. We hope that this information has been helpful in highlighting the changes plans should consider making to their Special Tax Notices.
