IRS Retirement Rule Finalized for Taxpayers Outside US (1)

The IRS Friday finalized regulations on withholding for retirement plan payments made to US taxpayers living outside of the country.

The regulations (RIN: 1545-BN52) affect tax withholding for retirement plan distributions under section 3405(a) and (b) of the Internal Revenue Code. No comments were received after the regulations were first proposed.

The final rule, which applies to payments and distributions made on or after Jan. 1, 2026, adopts the proposed rule with no major modifications other than minor nonsubstantive wording changes.

• Taxpayers may still apply the rule to earlier payments and distributions.
• Notice 87-7, ...