According to the 2005 NDS in section 3.2.3:

3.2.3.1 Bending members shall not be notched except as permitted by 4.4.3, 5.4.4, 7.4.4, and 8.4.1. A gradual taper cut from the reduced depth of the member to the full depth of the member in lieu of a square cornered notch reduces stress concentrations.

3.2.3.2 The stiffness of a bending member, as determined from its cross section, is practically unaffected by a notch with the follow dimensions:
notch depth = (1/6)(beam depth)
notch length = (1/3)(beam depth)

See 3.4.3 for the effect of notches on shear strength.

Changes from the 1997 NDS to the 2005 NDS include addition of the squared component on the strength reduction term and reformat of the shear question in an “allowable shear” format versus the “actual shear stress” format in the 1997 edition.

Also, see the 1997 NDS Commentary for additional information on changes.

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