Roth Catch Up for High Earners 50 or Over User Guide

The Secure Act 2.0 bill has made significant changes to retirement plans for companies effective January 1, 2026: catch up contributions are required to be treated as Roth contributions, no longer pre-tax, if made by participants who meet both of the following conditions:

  • 50 years of age or over

  • Wages (as defined in section 3121(a)) for the preceding calendar year from the employer sponsoring the plan are $145,000 or higher. Wages, defined in section 3121(a), are FICA wages, meaning that it is based on Medicare wages. If an employee is assigned to multiple EINs, the employee's Medicare subject wages from all of their EINs will be combined, and that combined amount is used to determine if they are a high wage earner.

    Note: The Medicare-subject wage of $145,000 will be annually adjusted for inflation.

This is applicable to 401(k), 403(b), and 457(b) retirement plans. This provision is not optional.

While the Secure Act 2.0 bill is mandated starting January 1, 2026, the IRS provision will go into effect as optional on January 1, 2024, and you can now begin configuring and using Roth Catch Up deductions.