The Mandatory Roth Catch-Up Starting 2026
Last verified: 2026-08-18.
Starting January 1, 2026, high-earning employees age 50 and over can no longer take their catch-up contributions as pre-tax dollars. The catch-up must be Roth. The rule comes from SECURE 2.0 §603 and applies whenever your prior-year FICA wages from the employer sponsoring the plan — Box 3 of Form W-2 — exceed $150,000 (the threshold for 2026 catch-ups, per IRS Notice 2025-67; indexed annually).
What the rule says, precisely
If your prior-year wages from the employer sponsoring the plan exceed the threshold, any catch-up contribution you make in the current year (under §414(v), or the §414(v)(2)(E) super catch-up for ages 60–63) must be designated Roth. The threshold is $150,000 of prior-year FICA wages from the plan-sponsoring employer (Box 3 of Form W-2) for 2026 catch-ups, per IRS Notice 2025-67 — a $145,000 statutory base set by SECURE 2.0 (2022) and indexed for inflation for years after 2024. The catch-up itself is still optional; only its tax treatment is forced.
Who is and isn't caught
- Caught: employees with prior-year FICA wages from this employer above the threshold. Wages from a different employer are irrelevant.
- Not caught: employees whose prior-year wages were below the threshold, even if current-year wages are higher.
- Not caught: self-employed individuals, partners, and anyone whose compensation is not reported on Form W-2. Partnership guaranteed payments and self-employment earnings are not FICA wages for this purpose.
- Not caught: employees of plans that do not offer a Roth option. The rule was designed to push such plans to add Roth; SECURE 2.0 §603(c) allows a plan to refuse to offer catch-ups at all rather than add Roth, but doing so forfeits catch-up access for everyone.
The two-year delay
The rule was originally scheduled to take effect January 1, 2024. IRS Notice 2023-62, issued in August 2023, granted a two-year administrative delay until January 1, 2026, in response to industry comments that recordkeepers and payroll systems could not be ready in time. Proposed regulations published January 10, 2025 confirmed the 2026 effective date, and the IRS issued final regulations on September 16, 2025 (T.D. 10033, 90 FR 44527) adopting the rule with operational guidance.
Why this matters for high earners
The mechanical consequence is straightforward: the catch-up contribution ($8,000 in 2026, plus the $11,250 super catch-up for ages 60–63) loses its current-year deduction. For a 60-year-old in a 37% federal bracket earning $250,000, the lost deduction on the full $11,250 super catch-up costs $4,162 in current-year taxes. Whether that is a net loss depends on bracket expectations in retirement, but the cash-flow hit lands in 2026.
Action items before year-end 2026
- Confirm the plan offers Roth. If it does not, push the employer to add it. Without a Roth option, catch-ups disappear entirely.
- Plan around the wage threshold. Bonuses, RSU vesting, and deferred-compensation timing affect prior-year FICA wages. Pushing wages below the threshold in one year escapes the rule the following year.
- Reset withholding. Roth catch-ups reduce take-home pay by the marginal-rate equivalent of the lost deduction; payroll systems may not adjust automatically.
Sources
- SECURE 2.0 Act of 2022, §603, mandatory Roth catch-up. Division T of Pub. L. 117-328: congress.gov/bill/117th-congress/house-bill/2617
- IRS Notice 2023-62, two-year administrative transition period: irs.gov/pub/irs-drop/n-23-62.pdf
- IRS final regulations on the §414(v)(7) Roth catch-up requirement, T.D. 10033, 90 FR 44527 (September 16, 2025), finalizing REG-100669-24: federalregister.gov/documents/2025/09/16/2025-17865
- Internal Revenue Code §414(v), catch-up contributions (Cornell LII): law.cornell.edu/uscode/text/26/414
- IRS, "Issue Snapshot — Designated Roth Contributions": irs.gov/retirement-plans/designated-roth-account
RetirementCheck101 flags whether the 2026 Roth catch-up rule applies to you and sizes the tax impact. Explore the free educational tool.
Frequently Asked Questions
Who has to make Roth catch-up contributions starting in 2026?
The rule reaches employees aged 50 and over whose prior-year FICA wages from the employer sponsoring the plan, as reported in Box 3 of Form W-2, exceeded $150,000 (IRS Notice 2025-67). For those participants any catch-up contribution made in the current year must be designated Roth rather than pre-tax, whether it is an ordinary catch-up or the super catch-up available at ages 60 through 63. Making a catch-up contribution remains entirely optional; only its tax character is compelled.
Which income counts toward the threshold?
Only FICA wages paid by the employer that sponsors the plan, as reported in Box 3 of Form W-2. Wages from a different employer are disregarded, and a substantial increase in current-year pay is likewise irrelevant, because the test looks exclusively at the prior year. The threshold is stated in 2023 dollars and adjusted for inflation after 2024.
Does the rule apply to self-employed people?
No. Self-employed individuals, partners, and anyone whose compensation is not reported on Form W-2 fall outside the rule, because partnership guaranteed payments and self-employment earnings are not FICA wages for this purpose. The distinction rests on how compensation is reported rather than on how much it is, so a highly compensated partner is unaffected while a salaried employee earning considerably less may be caught.
What happens if my plan does not offer a Roth option?
The rule cannot apply, because there is no Roth account into which the contribution could be directed. The statute permits a plan to discontinue catch-up contributions altogether rather than add a Roth feature, but a plan that takes that route removes catch-up access from every participant, which is a considerable cost to avoid an administrative change.
Why did this rule start in 2026 rather than 2024?
The provision was enacted to take effect January 1, 2024. IRS Notice 2023-62, issued in August 2023, granted a two-year administrative transition period after recordkeepers and payroll providers reported that their systems could not accommodate the change in the time available.