IRS Updates Retirement Plan Correction Rules and Adds an IRA Program

On October 22, 2026, Treasury and the IRS announced two revenue procedures that change how mistakes in retirement plans and individual retirement accounts get fixed. Revenue Procedure 2026-34 restructures the long-standing correction program for employer plans and replaces Revenue Procedure 2021-30. Revenue Procedure 2026-33 creates a brand-new correction system for IRAs. If you run a 401(k), a 403(b), a SEP or a SIMPLE IRA plan for your business, or you hold an IRA, this is worth a look.

Who is affected

EPCRS is the framework the IRS gives plan sponsors for fixing operational and document mistakes without losing a plan's tax-favored status. The IRS describes three paths. The Self-Correction Program lets a sponsor fix certain failures on its own, with no IRS filing and no fee, as long as the sponsor has compliance procedures in place and keeps records of the correction. The Voluntary Correction Program lets a sponsor come forward before an audit, submit the problem and the proposed fix, pay a user fee and receive a compliance statement. The Audit Closing Agreement Program applies when the plan is already under examination.

The October 22 announcement says the updated EPCRS applies to sponsors of qualified plans, section 403(b) plans, SEP arrangements and SIMPLE IRA plans. That covers many small businesses in Naperville and the surrounding counties: a family-owned company with a 401(k) that missed a deferral election, a practice that forgot to add an eligible employee, or an S corporation owner who is unsure whether a plan loan was handled correctly.

The new ICRS matters to a different group. The IRS says it is modeled on the EPCRS approach and rests on the SECURE 2.0 Act of 2022. It lets IRA custodians and IRA owners ask for correction of certain eligible inadvertent failures that trace back to a service-provider error. If you are an IRA owner who was hurt by a custodian's mistake, this gives a formal path that did not exist before.

Effective date and deadlines

• Employer plan correction (Revenue Procedure 2026-34): effective October 22, 2026, the day it was announced.
• IRA correction system (Revenue Procedure 2026-33): effective May 1, 2027.
• 60-day rollover waivers: these requests are currently handled as private letter ruling requests. According to the IRS, they will move into ICRS over 2027 and 2028.
• Comments: the news release says each revenue procedure names the issues where comments are wanted and gives a due date, but it does not print the dates. Read the text of each revenue procedure on irs.gov for them.

The existing automatic waiver and self-certification procedures for late rollovers stay available at no cost under Revenue Procedures 2020-46, 2016-47 and 2003-16, so you do not need to wait for ICRS if one of those already fits your facts.

What to do now

1. If you sponsor a plan, ask whoever administers it, whether that is a recordkeeper, third-party administrator or your CPA, whether any known mistakes are waiting to be corrected. Late deferrals, missed contributions and wrong eligibility dates are common examples.
2. Do not assume the older procedure still governs. For any correction started on or after October 22, 2026, confirm with your adviser which version of the rules applies.
3. Keep written records of every correction you make yourself under the Self-Correction Program. The IRS ties that path to having procedures and documentation.
4. If you own an IRA and a custodian error caused a problem, note the dates and gather statements now. The IRA program does not start until May 1, 2027, so ask your custodian how it plans to handle requests.
5. If a late rollover is the issue, check whether the automatic waiver or self-certification route fits before spending money on a ruling request.
6. If you want your voice heard on how the programs work, read the comment instructions in the revenue procedures.

How it connects to our guides

Our guide to retirement plans for business owners compares SEP, SIMPLE, solo 401(k) and defined benefit plans, which are the plans most affected by corrections. The page on IRA and 401(k) contributions explains the contribution limits that many plan mistakes involve. If you are moving money between accounts, see Roth conversions. Owners of S corporations can read how payroll for S corporation owners feeds plan contributions, and our tax planning page describes how we look at plan design for small businesses.

How we can help

We can review your plan documents and contribution history with you and point out items that may need a correction. We work with your plan administrator rather than replacing them, and we cannot predict how the IRS will respond to any particular filing. This page is general information, not advice for your situation.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.