IRS Proposes Four Standard Rollover Forms to Move 401(k) Money Without Paper Checks

The IRS on August 12 issued Notice 2026-49, a set of sample forms and procedures meant to make moving money between retirement plans faster and less error-prone. The guidance, required by Section 324 of the SECURE 2.0 Act, is optional for plans. But it describes where regulators want the rollover process to go: electronic transfers between institutions, standard data, and far fewer checks sent to participants in the mail.

What the notice proposes

The appendix contains four sample forms tied to a five-step process for direct rollovers where at least one side is an employer plan and no more than one side is an IRA. IRA-to-IRA transfers, which typically move through the brokerage industry's automated transfer system, are not covered.

1. The participant submits a rollover request to the receiving plan, with a signed authorization.
2. The receiving plan forwards that request to the distributing plan.
3. The distributing plan verifies the information and certifies account details, including the transfer methods it offers.
4. The receiving plan confirms it can accept the money and selects a transfer method.
5. The distributing plan sends the funds.

Each rollover would carry a unique rollover identification number assigned by the receiving plan, and the forms call for encrypted data exchange to protect personal information. Where a check cannot be avoided, it would be made payable to the receiving plan for the benefit of the participant and sent directly to that plan, not to the participant.

Why the IRS is acting

The notice cites Government Accountability Office reports finding the rollover process inconsistent and burdensome. A 2024 report found that nearly one-third of participants receive paper checks they must forward themselves, and noted that workers may change jobs 10 or more times over a 40-year career. The notice also references a federal finding that checks are more than 16 times as likely as electronic payments to be lost, stolen, altered or delayed.

The IRS is considering further steps: removing the regulation that lets plans hand participants a check to deliver, requiring electronic transfers or checks sent directly to the receiving plan, creating safe harbors for plans that use forms like these, and declaring certain demands, such as Medallion Signature Guarantees, impermissible. No safe harbors are offered yet.

The after-tax stakes

For a large balance, the mechanics matter. A direct trustee-to-trustee rollover is not taxable. An indirect rollover, where the participant receives the money, must be completed within 60 days, and any amount not redeposited in time is generally included in income. The tax code also requires separate accounting for after-tax money when it moves into another employer plan, so basis records need to follow the dollars.

Example, illustrative round numbers: a departing executive has $1.5 million in a 401(k), including $150,000 of after-tax contributions. If the old plan mails her a check that sits in a desk drawer past day 60, the entire pre-tax portion, $1.35 million, could become taxable in one year. In a direct electronic rollover using a process like the one in the notice, no check changes hands, the after-tax amount is identified in the data sent between plans, and nothing is taxable on the move.

Participants holding employer stock face an extra consideration. Rolling company shares into an IRA generally gives up the option to use net unrealized appreciation treatment, under which the stock's growth can be taxed later at capital gains rates. That decision is typically made before the rollover request is submitted.

Questions to raise with your advisor

• Whether after-tax contributions and any Roth balances are tracked separately and will be reported correctly to the receiving plan or IRA.
• Whether employer stock in the plan should be evaluated for net unrealized appreciation before any rollover.
• Whether both plans can complete the transfer electronically, avoiding a check payable to the participant.
• Whether a new employer's plan or an IRA offers better investment options, creditor protection or access to loans.

What to watch

Comments are due October 23, 2026. Any rule requiring electronic transfers would not take effect until plans and recordkeepers have time to build systems, the notice says. Watch for later guidance creating safe harbors for plans that adopt the standardized forms, which would likely speed adoption across the industry.

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