IRS Issues 2026 Tax Year Form 4972, for Claiming Special Tax Treatment on Employer Plan Distributions

The Internal Revenue Services has issued the 2026 tax year Form 4972, Tax on Lump-Sum Distributions (From Qualified Plans of Participants Born Before January 2, 1936). The form is used to take advantage of special grandfathered taxation options for certain individuals who were born on or before January 1, 1936. Those who qualify and have taken a lump sum distribution during the tax year may be eligible to satisfy their income tax obligation on such amounts using a favorable 10-year averaging formula, a capital gains rate of 20 percent, or both. A lump sum is generally defined as a taxpayer's receipt of all assets from all of an employer's retirement plans of one type within a tax year. Beneficiaries of such accounts are also generally eligible for the favorable tax treatments if the original account owner was born on or before January 1, 1936.