Alerts9.8.23

IRS Delays Mandatory Roth Catch-Up Contributions for Higher Paid Employees

Pay rate

The IRS provided a two-year administrative transition period delaying the required implementation of the SECURE 2.0 Act’s rule mandating high-paid participants to designate catch-up contributions as Roth contributions, which previously needed to be implemented in 2024

The Internal Revenue Service (IRS) has issued guidance in Notice 2023-62 delaying the mandatory Roth IRA catch-up contribution requirement for high-paid participants until 2026. The SECURE 2.0 Act (Consolidated Appropriations Act, 2023) required plan participants earning over $145,000 in prior-year FICA wages to designate any catch-up contributions as Roth contributions beginning in 2024. In essence, this new rule prohibited high-income earners, ages 50 and over, from making catch-up contributions as pre-tax contributions.

Keep Up to Date in a Changing World

Do you want to receive more valuable insights directly in your inbox? Visit our subscription center and let us know what you’re interested in learning more about.
Subscription Banner