New IRS IRA Correction Program: How to Fix a Missed 60-Day Rollover or RMD Error

Last updated: October 23, 2026 · By the Flex Tax and Consulting Group team

The 60-day rollover rule gives you 60 days to put money taken out of an IRA or workplace plan back into a retirement account. Miss it, and the money is usually taxed as a distribution. On October 22, 2026, the IRS announced a new IRA correction program that, starting May 1, 2027, gives IRA owners a formal way to fix a missed 60-day rollover and certain custodian mistakes, such as a missed required minimum distribution (RMD). Here is what changed, who it affects, and what still works today.

What the IRS announced on October 22, 2026

Treasury and the IRS released two revenue procedures together (IR-2026-126):

• Rev. Proc. 2026-33 sets up ICRS, a new correction program for IRAs modeled on the long-standing program for employer plans. For now it consists of one track, the IRA Voluntary Correction Program, where you file a request and the IRS reviews it.
• Rev. Proc. 2026-34 updates the Employee Plans Compliance Resolution System (EPCRS), the program employers use to fix mistakes in 401(k), 403(b), SEP and SIMPLE IRA plans. It replaces Rev. Proc. 2021-30 and took effect the day it was released.

Until now, IRA owners had few options when something went wrong. If a custodian missed an RMD or opened the wrong account, there was no program built for the IRA owner. A missed 60-day rollover that didn’t fit the free routes generally needed a private letter ruling, a slower and costlier request.

Which IRA mistakes the new program covers

ICRS covers only the four “eligible inadvertent failures” listed in Rev. Proc. 2026-33. Three of them must be caused by an error of a service provider, such as the IRA custodian, a financial adviser, a CPA or an attorney working on the account. The 60-day rollover failure does not need a service-provider error.

Mistake	What it looks like	Service-provider error required?	Standard fix in the rules
Missed 60-day rollover	A distribution was not rolled over within 60 days	No	IRS waiver, then the amount goes into an eligible retirement account
Missed RMD	The custodian paid out less than the required minimum distribution	Yes	Take the missed RMDs, with earnings, for each year affected
Wrong account opened	Money went into the wrong type of IRA, or a non-IRA account	Yes	Move the balance, with earnings, into the IRA type originally requested
Inherited IRA rollover error	A non-spouse beneficiary was told they could roll a distribution over	Yes	Put the amount into a new inherited IRA for the same beneficiary, within limits

The wrong-account fix has its own deadline: the request must be filed by December 31 of the year after the year the incorrect account was opened.

When an eligible mistake also triggered a penalty tax, the request can ask the IRS for relief. That includes the 6% excise tax on excess contributions, the excise tax on a missed RMD, and the 10% additional tax on early distributions. Relief is case by case, not automatic.

The 60-day rollover rule and the ways to fix a missed one

When you receive a distribution from an IRA or workplace plan, you generally have 60 days to deposit it into another IRA or plan. If you miss the deadline, the distribution is usually taxable, and if you are under 59½ it may also face the 10% additional tax. Two more rules matter:

• One IRA-to-IRA rollover per 12 months. The IRS cannot waive this limit. Direct trustee-to-trustee transfers don’t count toward it.
• Non-spouse beneficiaries can’t do a 60-day rollover from an inherited IRA. Money must move by direct transfer.

Here is how the fix options line up after the new rules:

Route	When it applies	IRS fee	Status
Automatic waiver	The financial institution received the funds in time and the miss was solely its error	None	Unchanged
Self-certification (Rev. Proc. 2020-46)	One of the listed reasons (such as a serious illness or a postal error) caused the delay; you give the receiving institution a model letter	None	Unchanged; not an IRS ruling, so the IRS can still review it later
Private letter ruling	Other cases	Set in the IRS’s annual user fee procedure	Available through 2027, then expected to end for these requests
ICRS request (new)	Other cases, filed by the IRA owner on Form 15443	$3,500 per request filed before January 1, 2028	Starts May 1, 2027; expected to be the only route from 2028

For a missed 60-day rollover, the IRA owner, not the custodian, must be the applicant, though a representative with a Form 2848 can file for them. The IRS weighs whether waiving the deadline is fair given the facts, such as an institution error, illness, or how much time passed.

What the new program does not cover

• No self-correction yet. Every ICRS fix needs an IRS submission. The IRS says self-correction is not available “at this time.”
• Your own mistakes, other than the 60-day rule. A missed RMD or wrong account caused by the owner, not a service provider, is outside the program.
• Egregious failures, misuse of IRA assets, or abusive transactions.
• Returns under IRS examination. Applicants generally must be current on their tax filings, and an open exam generally makes the owner ineligible.
• Paper filings. Submissions must be made electronically on Pay.gov.

If the IRS has already contacted you about a rollover or distribution, that’s a different situation. See our IRS audit representation page.

Business owners: plan correction rules changed too

If you sponsor a 401(k), SEP or SIMPLE IRA plan, Rev. Proc. 2026-34 is the bigger change for you, and it already applies. It carries out SECURE 2.0’s expansion of self-correction. Highlights include:

• More mistakes can be self-corrected without filing with the IRS, including many participant loan failures.
• Qualified and 403(b) plans no longer need a favorable IRS letter to self-correct.
• New rules for inadvertent benefit overpayments, which often don’t have to be repaid.
• Broader self-correction for SEP and SIMPLE IRA plans that meet the plan document requirements.

Self-correction generally must be finished within a reasonable period. A fix completed by the later of the end of the third plan year after the mistake or 18 months after it was found is treated as reasonable.

California: a failed rollover is taxed here too

California generally follows the federal rules for IRA distributions and rollovers. So when a rollover fails, the distribution is usually taxable on your California return as well. If you are under 59½, California also has its own 2.5% additional tax on early distributions, reported on Form FTB 3805P. That’s on top of the federal 10%. A federal waiver of the 60-day rule generally means the amount is treated as rolled over for California too, but the state return should be reviewed along with the federal one.

What to do now

1. Use direct transfers. A trustee-to-trustee transfer avoids the 60-day clock and the once-a-year limit.
2. Check your 2026 RMDs before December 31. Confirm with each custodian that the full amount is scheduled, especially for inherited IRAs.
3. Keep the paper trail. Save distribution dates, deposit confirmations and any custodian emails. Every waiver route depends on documentation.
4. Check your account types. Make sure each account is the IRA type you asked for (traditional, Roth, SEP, SIMPLE or inherited).
5. Business owners: review your plan’s loans, deferrals and documents against the new self-correction rules.
6. Get advice before you act. Which route fits depends on the facts, and the wrong move can create new problems.

For more year-end items, see our 2026 Year-End Tax Planning Checklist.

FAQ

What is the 60-day rollover rule?

You generally have 60 days from the day you receive a distribution from an IRA or retirement plan to deposit it into another IRA or plan. If you miss it, the amount is usually taxable, and an early distribution may face extra taxes.

Can I fix a missed 60-day rollover?

Sometimes. The automatic waiver and self-certification are available now at no IRS cost if you qualify. Starting May 1, 2027, you can also request a waiver through the new IRA correction program on Form 15443.

What is the IRA Compliance Resolution System (ICRS)?

It is a new IRS program, created by Rev. Proc. 2026-33, that lets IRA owners and custodians request corrections of certain inadvertent IRA mistakes. It takes effect May 1, 2027.

My custodian missed my RMD. What happens?

A missed RMD can trigger a 25% excise tax, reduced to 10% if corrected in time. From May 1, 2027, a missed RMD caused by a service-provider error can be corrected through ICRS, and the request can ask the IRS to waive the excise tax.

Does California follow the federal rollover rules?

Generally yes. A failed rollover is usually taxable for California too, and early distributions can face California’s 2.5% additional tax.

Questions about a rollover or RMD that went wrong? Our tax planning team works with Bay Area individuals, retirees and business owners on retirement account issues.

Related reading

• 2026 Year-End Tax Planning Checklist for High Earners, Business Owners & Investors
• Navigating Retirement Savings: Roth IRA vs. 401(k)
• IRS Audit Representation

Sources

Last reviewed October 23, 2026.

• IRS: IR-2026-126, Treasury and IRS update retirement plan correction program and establish correction program for IRAs (October 22, 2026)
• IRS: Rev. Proc. 2026-33, IRA Compliance Resolution System
• IRS: Rev. Proc. 2026-34, Employee Plans Compliance Resolution System
• IRS: FAQs on waivers of the 60-day rollover requirement
• California FTB: Early distributions

This article provides general information only and is not tax or legal advice. Tax outcomes depend on individual facts and circumstances. Contact us about your specific situation.