Notice 2026-48, August 7, 2026

In division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act), Congress introduced a paradigm shift in retirement savings incentives for low- and moderate-income taxpayers. Specifically, Section 103 of the SECURE 2.0 Act added Section 6433 to the Internal Revenue Code (Code), replacing the Retirement Savings Contributions Credit (commonly known as the Saver’s Credit) under Section 25B with a direct federal matching contribution of up to $1,000 per eligible individual. This match is paid directly by the Secretary of the Treasury to “applicable retirement savings vehicles” for taxable years beginning after December 31, 2026.

To bridge the gap between statutory enactment and operational implementation, the Department of the Treasury and the Internal Revenue Service (IRS) issued Notice 2026-48. The notice serves as an official “Notice of Intent to Issue Regulations with Respect to Saver’s Match Contributions”. It outlines key administrative, tax, and plan compliance rules that the agencies expect to integrate into forthcoming proposed regulations. It provides practitioners, plan sponsors, and financial institutions with a technical roadmap to prepare for the 2027 effective date, incorporating feedback from Notice 2024-65, 2024-39 IRB 633, and addressing directives from Executive Order No. 14403.

Background and the TrumpIRA.gov Initiative

Notice 2026-48 sits at the intersection of legislative reform and executive action. Section III of the notice outlines the statutory foundation of the Saver’s Match, which fundamentally alters the mechanics of Section 25B. While the historical Saver’s Credit was a nonrefundable tax credit limited to a taxpayer’s tax liability, the Saver’s Match under Section 6433 is “allowed as a credit payable as a contribution to the eligible individual’s applicable retirement savings vehicle” and is available even if the individual has zero tax liability. This transition represents a major operational shift. The old Saver’s Credit will remain available after 2026 only for contributions made to Achieving a Better Life Experience (ABLE) accounts under Section 529A, pursuant to amendments made by Section 70116 of the One, Big, Beautiful Bill Act (OBBBA), Pub. L. 119-21, 139 Stat. 72 (2025).

Compounding these changes, Executive Order No. 14403, issued on April 30, 2026, established a federal policy to “increase public awareness of Saver’s Match contributions and to facilitate participation in eligible retirement savings vehicles”. To execute this policy, the Executive Order directs the Secretary of the Treasury to establish a public portal, “TrumpIRA.gov,” by January 1, 2027. This website will list registered financial institutions that offer high-quality, low-cost IRAs accepting Saver’s Match contributions, focusing on self-employed individuals and independent contractors who lack access to employer-sponsored plans. Notice 2026-48 emphasizes that “individuals who contribute to IRAs, and who are otherwise eligible, are entitled to a Saver’s Match contribution”.

Statutory Mechanics and Eligibility Analysis

The IRS’s analysis of Section 6433 establishes a rigid framework for determining eligibility. Under Section 6433(c), an “eligible individual” must have attained age 18 by the close of the taxable year. The definition explicitly excludes:

A student as defined in Section 152(f)(2);
An individual claimed as a dependent on another taxpayer’s return; and
A nonresident alien, unless they have made a resident election under Section 6013(g) or (h).

Under Section 152(f)(2), a student is generally defined as an individual who, during each of five months of the calendar year, “is enrolled full-time at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance”.

A key technical hurdle discussed in Notice 2026-48 is the intersection of the Saver’s Match with the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), Pub. L. 104-193, 110 Stat. 2105. Under 8 U.S.C. §§ 1611(a) and (c)(1), non-qualified aliens are generally prohibited from receiving a “federal public benefit”. In a significant development, the Justice Department’s Office of Legal Counsel (OLC) issued a Memorandum Opinion on November 19, 2025, opining that “Saver’s Match contributions are ‘federal public benefits’ within the meaning of” PRWORA. Consequently, the Treasury Department and the IRS anticipate “addressing the applicability of PRWORA to Saver’s Match contributions in forthcoming proposed regulations”, which may exclude certain non-citizens from claiming the match even if they are resident aliens for tax purposes.

Definition and Calculation of Qualified Contributions

Section 6433(d)(1) defines “qualified retirement savings contributions” as the sum of:

Qualified retirement contributions under Section 219(e) (including cash contributions to traditional or Roth IRAs);
Elective deferrals under Section 402(g)(3) (including contributions to 401(k), 403(b), SIMPLE IRAs, or SEPs) and elective deferrals under governmental Section 457(b) plans; and
Voluntary after-tax employee contributions to a qualified plan described in Section 4974(c).

These contributions must generally be made by the end of the taxable year. However, traditional and Roth IRA contributions made by the tax filing deadline (excluding extensions) can be designated for the prior taxable year. This includes tax refunds directed to IRAs via Form 8888, Allocation of Refund, provided the contribution is actually executed by the IRS by the tax filing deadline. Notice 2026-48 notes that if the tax-refund contribution is not made by the tax filing deadline, “the contribution cannot be taken into account as a qualified retirement savings contribution for that year, but it can be taken into account as a qualified retirement savings contribution for the taxable year in which it is made”.

Crucially, the statutory language under Section 6433(d)(2)(A) requires that qualified contributions be “reduced (but not below zero) by the aggregate distributions received by the individual during a specified testing period”. The testing period spans the current taxable year, the two preceding taxable years, and the period after the current taxable year up to the due date of the return, including extensions. Notice 2026-48 clarifies that certain distributions are disregarded for this reduction, including Section 72(p) plan loans, Section 401(k)(8) excess contributions, Section 401(m)(6) excess aggregate contributions, Section 402(g)(2) excess deferrals, and Section 408(d)(4) returned contributions, as well as rollovers or trustee-to-trustee transfers to other eligible plans. Furthermore, any distributions received by a spouse are treated as received by the eligible individual if they file a joint return for both the year of the contribution and the year of the distribution.

The Match Calculation and Phaseout Formulas

The unreduced applicable percentage for the match is 50 percent of qualified contributions up to $2,000, yielding a maximum statutory match of $1,000. However, Section 6433(b)(2) mandates a phaseout of this percentage based on the taxpayer’s Modified Adjusted Gross Income (MAGI).

For Saver’s Match purposes, Section 6433(f)(1) defines MAGI as Adjusted Gross Income (AGI) determined without regard to the foreign earned income exclusion under Section 911, or territorial exclusions under Sections 931 and 933. Furthermore, MAGI is calculated “without regard to any exclusion or deduction allowed for any qualified retirement savings contribution made during the taxable year”. This means pre-tax elective deferrals and deductible traditional IRA contributions must be added back to AGI to arrive at MAGI. For joint filers, the MAGI equals the “combined MAGI of both spouses”.

The phaseout calculation represents a complex mathematical formula. Notice 2026-48 outlines the formula to determine the percentage point reduction:

Percentage point reduction = 50 percentage points x ((MAGI - applicable dollar amount) / phaseout range)

The resulting reduction is “rounded down to the next lowest whole percentage point and subtracted from 50%” to determine the taxpayer’s applicable match percentage.

The statutory parameters for the 2027 taxable year are structured as follows:

Married Filing Jointly / Surviving Spouses: Applicable dollar amount of $41,000; phaseout range of $30,000 (phasing out completely at MAGI of $71,000).
Head of Household: Applicable dollar amount of $30,750; phaseout range of $22,500 (phasing out completely at MAGI of $53,250).
Single / Married Filing Separately / Others: Applicable dollar amount of $20,500; phaseout range of $15,000 (phasing out completely at MAGI of $35,500).

For taxable years after 2027, the applicable dollar amounts (and thus the phaseout thresholds) are adjusted for inflation under Section 6433(h), but the width of the phaseout ranges remains fixed.

To illustrate, Notice 2026-48 provides concrete examples. In Example 1, Taxpayer A is a single filer with a MAGI of $30,000 who makes a $1,500 contribution to a traditional IRA in 2027. The percentage point reduction is calculated as 50 x (($30,000 - $20,500) / $15,000) = 31.6667. Rounded down to the nearest percentage point, this yields a reduction of 31. Subtracting 31 from 50 percent results in an applicable percentage of 19 percent. Taxpayer A’s Saver’s Match contribution is $1,500 x 19% = $285.

Claiming and Payment Mechanics: Traditional IRAs, Roth Conversions, and Employer Plans

Taxpayers must claim the match on a separate, newly created Form 8880-A, Saver’s Match for Qualified Retirement Savings Contributions. Under Section 6433(a)(2)(B), if the calculated match is greater than zero but less than $100, the taxpayer may elect to receive it as a refundable income tax credit. Otherwise, it must be directed to an “applicable retirement savings vehicle”. Notice 2026-48 details how the Treasury intends to execute these direct payments:

Traditional IRAs: The taxpayer must provide an “IRA tracking number” on Form 8880-A. This tracking number is generated by the IRS and Treasury through a registration process for traditional IRA providers willing to accept Saver’s Match contributions. The taxpayer must establish the account with a registered provider prior to filing in order to receive the IRA tracking number.

Roth IRAs: Under Section 6433(e), Saver’s Match contributions cannot be deposited directly into a Roth IRA. To accommodate taxpayers desiring a Roth destination, “the Treasury Department would establish a conduit traditional IRA for the eligible individual, and there would be an immediate trustee-to-trustee transfer from the conduit IRA to the eligible individual’s chosen Roth IRA”. The notice cautions that “this transfer would be a Roth IRA conversion that would be subject to federal income tax and reporting described in Treas. Reg. § 1.408A-4” and subject to withholding under Section 3405.

Employer-Sponsored Plans: The IRS is considering three distinct pathways for directing the match to qualified 401(k), 403(b), or governmental 457(b) plans under Section 6433(e):

The Registration Path: Plans register with the IRS. The Treasury establishes a conduit IRA and immediately rolls over the contribution to the registered plan.
The Automatic Match Path: Plans provide plan-level and participant-level data to the IRS to facilitate an automatic direct match, utilizing mechanisms similar to the auto-portability rules under Section 120 of the SECURE 2.0 Act.
The Rollover Path: The taxpayer receives an “IRS-provided Saver’s Match Confirmation Number,” which they submit to their employer plan. The plan coordinates with the Treasury, which deposits the money into a conduit IRA that immediately rolls over to the plan.

Notice 2026-48 notes that payments made through a rollover from a conduit IRA to a retirement plan “would not be treated as contributions made directly from the Treasury Department” and “would be treated like any other rollover and would not be subject to special Saver’s Match contribution rules”.

Tax Treatment and Plan Compliance Integration

Once deposited, Saver’s Match contributions “are not includible in gross income” for the year of contribution. For plan compliance, Section 6433(f)(2)(A)(i) dictates that the match is generally treated as an elective deferral made by the eligible individual. This integration is highly technical:

The match is treated as an elective deferral for determining direct rollover eligibility under Section 401(a)(31)(A), involuntary distribution limits under Section 411(a)(11), loan limit calculations under Section 72(p), and joint and survivor annuity rules.
Under Section 6433(f)(2)(B), the match “will not be taken into account with respect to any applicable limitation” under Sections 402(g)(1), 403(b), 408(a)(1), 414(v)(2), 415(c), or 457(b)(2). This prevents the match from displacing a participant’s own standard contribution capacity.
The match is disregarded for nondiscrimination testing under Section 401(a)(4), the actual deferral percentage (ADP) test under Section 401(k)(3), and the top-heavy test under Section 416.
The match is subject to heightened distribution restrictions. Unlike regular elective deferrals, the match cannot be distributed on account of hardship under Sections 401(k)(2)(B)(i)(IV) or 403(b)(7)(A)(i)(V), or unforeseeable emergencies under Section 457(d)(1)(A)(iii). However, Notice 2026-48 clarifies that “earnings attributable to Saver’s Match contributions are not subject to these hardship and unforeseeable emergency distribution restrictions”. Plans must maintain separate accounting to track these contributions.

Erroneous Match Contributions and the Recovery Tax

If the IRS later determines a contribution was erroneous (e.g., due to an ineligible taxpayer or incorrect MAGI calculation), Section 6433(f)(4)(A) treats the erroneous contribution as an “underpayment of tax” for the year the error is determined. However, accuracy-related and fraud penalties under part II of subchapter A of chapter 68 do not apply.

To prevent double taxation and penalties upon withdrawal, Section 6433(f)(4)(B) provides relief. If the erroneous contribution is distributed from the retirement account by the tax filing deadline (including extensions) for the year of the IRS’s error determination, the distribution is non-taxable and exempt from the 10 percent early distribution tax under Section 72(t). Any attributable earnings distributed, however, remain subject to regular income tax but are exempt from the Section 72(t) tax.

To deter rapid cash-outs of valid Saver’s Match contributions, Section 6433(f)(6) imposes a “Saver’s Match recovery tax”. If an early distribution subject to the Section 72(t) tax is made from an applicable retirement savings vehicle, and the aggregate match contributions exceed the account balance at the end of the taxable year, an additional tax applies. This recovery tax is equal to the excess, reduced by any Section 72(t) early distribution tax paid and allocable investment losses. Taxpayers can reduce or eliminate this tax by making additional “direct trustee-to-trustee transfer” contributions within 60 days of the early distribution, up to the due date of their return.

Operational Requirements for Plan Amendments

Participation in the Saver’s Match program is voluntary; neither retirement plans nor IRAs are required to accept these contributions. However, the Treasury and IRS encourage voluntary adoption. If a plan sponsor elects to accept Saver’s Match contributions, Notice 2026-48 confirms that the plan must be amended.

Because this is a discretionary amendment, under Section 6.02 of Rev. Proc. 2022-40, the deadline for adoption is the end of the plan year in which the amendment is operationally put into effect. Furthermore, if a plan sponsor subsequently decides to terminate its participation, the plan may be amended prospectively to cease accepting match contributions. The IRS concludes that such a prospective termination “would not violate the anti-cutback rules of section 411(d)(6) of the Code and section 204(g) of ERISA”.

Prepared with assistance from Google Notebook.