Roth Catch-Up Contributions: 2026 Rule Guide for CPAs

A key provision of the SECURE 2.0 Act takes effect in 2026. This rule changes how catch-up contributions work for high-earning employees. The IRS originally scheduled these roth catch up contributions for 2024. However, they delayed implementation to give plan sponsors more time to prepare their systems and processes.

With 2026 approaching, plan sponsors must act now. This change affects employer-sponsored retirement plans including 401(k), 403(b), and 457(b) plans.

For the first time, employers will require certain employees to make catch-up contributions roth. Plan sponsors need to review plan features, evaluate their systems, and communicate clearly with participants. To help clients, prospects, and others, WhippleWood CPAs has summarized the key roth catch-up contribution requirements below.

Who is Subject to the Roth Catch-Up Contribution Requirement?

The roth catch up contribution requirement affects high earners. Employees who made over $145,000 in FICA wages from the plan sponsor last year must comply. The IRS adjusts this threshold annually for inflation.

FICA wages generally include regular pay, bonuses, and other taxable compensation subject to Social Security and Medicare taxes. They exclude income like retirement plan distributions or tax-exempt benefits.

Only wages from the common-law employer sponsoring the plan count toward this threshold. Compensation from an affiliate that does not participate in the plan does not apply. Plan sponsors must understand this distinction because it determines which employees receive Roth catch-up treatment in 2026.

Employees earning below $145,000 threshold face no restrictions. They can choose between traditional or roth ira catch up contributions if their plan offers both options.

2026 Catch Up Contributions: What’s Changing for High Earners

Staring in 2026, the rules change for high earners. Participants age 50 or older who earned over $145,000 must make their catch up contributions 2026 on a Roth basis. Employees make these contributions on an after-tax basis, and the funds grow tax-free when they meet certain conditions.

Plans without a Roth option cannot accept catch up roth contributions from high earners. Plan sponsors can choose whether to add a Roth feature, though many will need it to support their higher-paid employees’ retirement goals. The rule applies fully or not at all—no partial application exists. New hires and employees who earned less than $145,000 from the plan sponsor in the prior year are not subject to the Roth requirement.

Catch-Up Contribution Limits That Remain the Same

The annual catch up contribution age 50 limit for participants stays in place. For 2025, employees can contribute an additional $7,500 on top of the standard $23,500 limit. The IRS may increase these 2024 catch up contributions limits amounts in future years based on inflation.

Employees not subject to the roth catch up 2024 requirement keep their flexibility. They can make catch-up contributions on a pre-tax or Roth basis. This depends on what their plan allows.

This Roth requirement only applies to employer-sponsored retirement plans. It does not affect traditional or ira catch up contributions. Individuals age 50 and over may still contribute an additional $1,000 to an IRA, regardless of income. This is subject to income requirements and 2026 roth ira limit thresholds for Roth IRA contributions.

Super Catch Up Rules for Ages 60 to 63 in 2025

SECURE 2.0 introduced another change that is already in effect. Beginning in 2025, participants age 60 to 63 may contribute more than the standard catch-up amount. This higher limit is the greater of $10,000 or 150% of the standard catch-up contribution. For 2025, this enhanced catch-up contribution limit equals $11,250.

This super catch up rules feature is optional. Plans choose whether to offer enhanced catch-up for this age group. If they do, they must make the super roth feature available to all eligible participants.

Action Steps for Plan Sponsors

Plan sponsors should evaluate their plan features now and make any needed updates. Plans that don’t currently offer roth catch up contributions should add this option. This allows high earners to continue making catch up roth ira contributions starting in 2026. Adding a Roth feature requires a formal plan amendment and coordination with service providers.

Plan sponsors must also review their payroll systems to ensure accurate tracking of FICA wages. This information determines which employees face the catch up contributions roth requirement each year. Employers may need to implement new processes to flag eligible participants automatically.

Update participant communications to explain what is changing, when it takes effect, and whether it applies to them. Coordinate with recordkeepers and third-party administrators to support a smooth rollout.

Finally, plan sponsors must complete a document review. Work with plan advisors to confirm:

• Your plan language supports the roth ira contribution limit 2026 requirement
• Optional features like the super catch-up for ages 60-63 are properly included

Contact Us

The 2026 Roth catch-up contribution rule represents a major change for retirement plans. Plan sponsors hold the key to success. They must ensure participants continue saving smoothly, even though the changes affect only high earners. With roth ira 2026 contribution requirements approaching, proactive planning makes all the difference.

WhippleWood CPAs can help if you have questions about how does catch up contribution work or need assistance with:

• Retirement plan audits
• Tax planning matters

WhippleWood CPAs can help by calling 303-989-7600. We look forward to speaking with you soon.