IR-2025-07, Jan. 10, 2025 — The Department of the Treasury and the Internal Revenue Service issued proposed regulations today addressing several SECURE 2.0 Act provisions relating to catch-up contributions, which are additional contributions under a 401(k) or similar workplace retirement plan that generally are allowed with respect to employees who are age 50 or older.
For a traditional or Roth IRA, the annual catch-up amount in 2024 and 2025 is $1,000, which boosts your total contribution potential to IRAs to $8,000. If you participate in a 401(k) , Roth 401(k) , 403(b) , or similar workplace retirement savings plan, the catch-up opportunity is even greater: up to $7,500 a year.
IRS Issues Guidance on Mandatory 401(k) Roth Catch-up Starting in 2026 Starting January 1, 2026, high-income earners will face a significant shift in retirement savings rules due to the new Mandatory Roth Catch-Up Contribution requirement. If you earn more than $145,000 annually (indexed for inflation), your catch-up contributions to 401(k ...
Significant changes to 401(k) plans are coming in 2026, and if you make age 50+ catch-up contributions, you may need to be prepared. Under SECURE Act 2.0, employees earning above a certain threshold will be required to make catch-up contributions as Roth rather than pre-tax.
Understanding Catch-Up Contributions . There are annual limits to how much you can contribute to your 401(k). In 2024, for people under 50 years old, this limit is $23,000, increasing to $23,500 ...
Catch-up contributions are ignored when 415(c) and ADP testing. If a 415(c) or ADP test fails, elective deferrals can be recategorized as catch-up contributions to help pass testing. Tax Treatment. As elective deferrals, catch-up contributions can be made on a pre-tax or Roth basis - depending on the plan’s provisions.
The Roth catch-up rule, originally scheduled to take effect in 2024, was delayed to January 1, 2026, under IRS Notice 2023-62 (initial guidance on the Roth catch-up rule). Delaying the effective date provided much-needed relief to key stakeholders.
Under the new rules, those who make $145,000 or more will have to put their catch-up contributions into a Roth 401(k), so the contributions will be made with after-tax dollars. This change was ...
Key changes to Roth 401(k) account rules may affect your tax planning and retirement savings. ... For more information, see New SECURE 2.0 Super 401(k) Catch-Up Contribution for Ages 60-63.
In 2023, workers 50 and older can make catch-up contributions of up to $7,500, in addition to the standard $22,500 maximum for 401(k) and other employer-provided plans. The case for Roth contributions
A SIMPLE IRA or a SIMPLE 401(k) plan may permit annual catch-up contributions up to $3,500 in 2023 and $3,000 in 2015 - 2022. ... You can make catch-up contributions to your traditional or Roth IRA up to $1,000 in 2015 - 2023. Catch-up contributions to an IRA are due by the due date of your tax return (not including extensions). Related.
The proposed regulations are for the requirement imposed by SECURE 2.0 that catch-up contributions for highly compensated employees in Section 401(k), 403(b), and governmental 457(b) plans be designated as Roth contributions (the “mandatory Roth catch-up” provision). The Roth catch-up requirement was originally scheduled to become effective ...
Contribution limits: For the 2025 plan year, the pre-tax contribution limit into a 401(k) plan is $23,500, with a catch-up contribution limit of $7,500 for employees aged 50-59, and $11,250 for employees aged 60-63 (known as super catch-up contributions). Mandatory Roth contributions: The SECURE 2.0 provision mandating Roth catch-up ...
The IRS is offering relief on new 401(k) catch-up contribution rules for certain high earners. ... The SECURE 2.0 Roth catch-up contribution rule won’t apply to taxpayers making $144,999 or less ...
Applicability Dates: January 1, 2025 for Super Catch-Up and January 1, 2026 for Roth Catch-Up. Under SECURE 2.0, the Roth catch-up rule was effective for taxable years beginning after December 31, 2023, while the super catch-up rule was effective for taxable years beginning after December 31, 2024.
Starting January 2026, employees who contribute to 401(k), 403(b), or 457(b) ... All catch-up as Roth: If a participant’s prior year FICA wages from the employer sponsoring the plan exceed $145,000 (indexed to 2024), then all catch-up contributions must be made on a Roth basis. It’s not split between contributions made before they hit ...
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The Roth mandate applies to 401(k), 403(b) and governmental 457(b) plans – but not to SIMPLE IRA plans. ... The threshold on 2025 wages for determining required Roth catch-up contributions for 2026 (when the rule becomes effective) will not be available until the end of this year. Self-employed individuals have self-employment income, not wages.
