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2-Year Delay in Roth Catch-Up Requirement

Publications - Client Resource | August 25, 2023

The IRS announced today that the new SECURE 2.0 catch-up requirement for high-earners in 401(k), 403(b), and 457(b) plans will not be enforced until 2026. The SECURE 2.0 Act implemented a requirement that age 50+ catch-up contributions by participants who earned more than $145,000 during the prior year must be done as Roth (after-tax) contributions. The provision was scheduled to take effect January 1, 2024. The new IRS guidance effectively delays the requirement until January 1, 2026. Until that time, plans can continue accepting pre-tax catch-up contributions from all participants, regardless of their prior year wages. Further, plans without Roth provisions need not add a provision at this time.

Stay tuned for more last minute guidance on SECURE 2.0.