New IRS Guidance Aims to Simplify 401(k) Rollover Rules
The IRS issued Notice 2026-49 on August 12, 2026, with 4 optional sample forms and a 5-step process to simplify direct rollovers between retirement plans and IRAs. The guidance does not change rollover tax rules, and the public may comment through October 23, 2026.
Takeaways
- Notice 2026-49 introduces 4 optional rollover forms.
- The guidance outlines a 5-step direct rollover process.
- It applies to plan-to-plan and plan-to-IRA rollovers, not IRA-to-IRA transfers.
- The proposed process uses secure data sharing and a unique rollover ID.
- Treasury and the IRS are considering additional rollover guidance.
How the IRS Plans to Simplify 401(k) Rollovers
On August 12, 2026, the IRS and the Treasury Department issued new 401(k) rollover guidance called Notice 2026-49. [1]
The guidance was required by the SECURE 2.0 Act of 2022.
It gives retirement plans 4 sample forms and a 5-step process to move your money directly from one retirement account to another.
More specifically, the forms apply when at least one side of the rollover is an employer retirement plan.
They are not intended for IRA-to-IRA rollovers or transfers.
Here’s why we believe that matters.
Moving a 401(k) today can be slow and confusing.
The IRS notes that some plans still mail a paper check to you, which you then have to forward yourself – a check that could be lost or delayed along the way.
Notice 2026-49 cites a 2024 Government Accountability Office (GAO) report that found nearly one-third of participants surveyed received paper checks that they then had to send to the receiving plan. [1]
The new forms aim to reduce that burden.
They ask your old plan and your new plan to talk to each other directly, instead of leaving you stuck in the middle.
Under the proposed process, you would start by submitting a rollover request to the plan or IRA receiving your money.
The receiving plan would then communicate with your old plan and coordinate the rollover on your behalf.
Each rollover would get a unique rollover identification number, called a RIN, assigned by the receiving plan.
The RIN would be used in communications between the plans so they do not have to repeatedly transmit as much personally identifying information. [1]
When information is transmitted electronically, the guidance says plans should use encryption to protect your personal identifying information.
The forms themselves must also be transmitted securely.
The IRS says the goal is to make rollovers simpler and easier for both savers and plan administrators. [2]
But there’s a catch: The forms are optional.
Plan sponsors do not have to use them, and the IRS is not yet offering a safe harbor for plans that do.
This is not a mandatory new rollover system.
Plans may choose to use the sample forms and proposed procedures, while Treasury and the IRS are also asking for public input before deciding whether to issue additional guidance.
Comments are due by October 23, 2026. [1]
After reviewing those comments, Treasury and the IRS will consider whether to provide safe harbors based on the use of the sample forms and proposed procedures.
How Would the Proposed 5-Step Rollover Process Work?
Notice 2026-49 lays out 5 proposed steps designed to reduce how much of the rollover process falls on you. [1]
Step 1: You submit the rollover request.
You complete Form 1 and send it securely to the retirement plan or IRA that will receive your money.
Step 2: The receiving plan contacts your old plan.
The receiving plan assigns your rollover identification number and sends the rollover request and your authorization to the distributing plan.
Step 3: Your old plan verifies the rollover.
The distributing plan verifies the information and your eligibility for the distribution. It then sends information about your account and available transfer methods to the receiving plan.
Step 4: The receiving plan approves the rollover.
The receiving plan verifies that it can accept the rollover and selects an available transfer method.
Step 5: Your old plan transfers the money.
The distributing plan sends the rollover directly to the receiving plan using the selected transfer method. [1]
The forms are also designed to standardize important information exchanged during a rollover, including pre-tax amounts, Roth amounts, Roth basis, after-tax amounts and basis, and the year of initial Roth contributions when applicable. [1]
The participant authorization in Form 1 also states that the type of retirement savings – pre-tax or Roth – remains the same through the rollover process. [1]
What Happens to Paper 401(k) Rollover Checks?
One of the most important parts of the new guidance involves paper checks.
Notice 2026-49 encourages plans to complete rollovers electronically whenever possible. If an electronic rollover isn’t available, however, the proposed process still allows a paper check. [1]
The difference is where that check would go.
Under the proposed procedures, if a check is the only transfer method available, it should be made payable to the receiving plan for your benefit and mailed or sent directly to the receiving plan – rather than being sent to you to forward.
Treasury and the IRS are also considering future guidance that could go further.
Among the possibilities are:
- Removing the existing rule that allows certain direct-rollover checks to be sent to participants.
- Requiring administrators and trustees to complete rollovers electronically or send paper checks directly to the receiving plan.
- Creating safe harbors for plans that use standardized forms and procedures.
- Clarifying that certain burdensome rollover requirements, such as requiring a Medallion Signature Guarantee or certain distribution letters, could be impermissible.
- Preventing a distributing plan from blocking an electronic rollover when both plans are capable of completing one electronically. [1]
Again, these potential changes are not in effect yet.
The U.S. Treasury and the IRS are requesting public comments before deciding whether to issue additional guidance.
The agencies also acknowledge that some plans may not yet have the infrastructure needed for electronic rollovers.
Any future requirements would not take effect until administrators and trustees have sufficient time to update their systems. [1]
Who Does the New IRS Rollover Guidance Apply To?
The new IRS rollover guidance applies to direct rollovers to or from an employer retirement plan – but not to IRA-to-IRA rollovers or transfers. [1]
It would cover moving money from a 401(k), 403(b), or governmental 457(b) plan into a new employer’s plan or an IRA.
It also covers moving eligible money from an IRA into an employer plan that accepts the rollover.
What it does not cover is moving money from one IRA to another IRA.
Notice 2026-49 says IRA-to-IRA transfers are usually completed through the Automated Customer Account Transfer Service, or ACATS, which already provides an electronic process for many account transfers. [1]
Rollovers are one of the most common money moves in retirement savings.
By year-end 2025, IRAs held $19.2 trillion, representing 39% of total U.S. retirement market assets. [3]
Rollover activity has helped fuel that growth.
ICI reports that households transferred $670 billion from employer-sponsored retirement plans to traditional IRAs in 2022. [3]
By mid-2025, about 27 million households – 61% of traditional IRA-owning households – had traditional IRAs that included rollover assets. [3]
For now, just know that the rollover process isn’t changing overnight.
The IRS has created a standardized process that plans can choose to use, while the U.S. Treasury and the IRS consider whether additional requirements are needed.
If more plans adopt the forms – or if future guidance requires greater use of electronic transfers – moving retirement money after changing jobs or retiring could eventually involve less paperwork and less back-and-forth between you and your financial institutions.
Until then, check with both your current plan and the account receiving your rollover to understand the process they require.
Have questions about rolling over your 401(k)? Book a complimentary 15-minute 401(k) Strategy Session with one of our advisors.
Sources
[1] Internal Revenue Service. Notice 2026-49: Guidance on Section 324 of the SECURE 2.0 Act With Respect to Rollovers. August 2026. https://www.irs.gov/pub/irs-drop/n-26-49.pdf
[2] Internal Revenue Service. IR-2026-91: Treasury, IRS Provide Guidance to Simplify and Standardize the Rollover Process. August 12, 2026. https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-rollovers-between-retirement-plans-and-individual-retirement-accounts
[3] Investment Company Institute. The Role of IRAs in US Households’ Saving for Retirement, 2025. June 3, 2026. https://www.ici.org/news-release/rollovers-fuel-multitrillion-ira-market
