(a) For taxable years beginning on or after January 1, 2026, Section 530A of the Internal Revenue Code, relating to 530A accounts, added by Section 70204(a)(1) of Public Law 119-21, shall apply, except as otherwise provided.

(b) The amount of the additional tax imposed under Section 530A(d)(2) of the Internal Revenue Code, relating to tax treatment of allowable distributions, as applicable for federal income tax purposes for the same taxable year, shall be computed using a rate of 2.5 percent in lieu of the rate provided in that section.

(c) Section 530A(d)(5)(C) of the Internal Revenue Code, relating to distributions of excess contributions, shall not apply.