For years, catch-up contributions were a simple perk for savers over 50: put in extra money, get a tax deduction now. Starting in 2026, that changes for higher earners. If someone earned above a certain wage last year, their catch-up contributions have to go in as Roth, which means after-tax dollars and no upfront deduction. It is a real shift, and it lands on plan sponsors and payroll teams more than on the savers themselves.
This comes out of SECURE 2.0, and the final rules are now settled enough to act on. Here is who the rule hits, the exact 2026 numbers, and what retirement plans need in place.
A catch-up contribution is the extra amount someone age 50 or older can add to a 401(k) or similar plan on top of the standard deferral limit. Traditionally, a worker could make that catch-up as pre-tax money and lower their taxable income.
SECURE 2.0 changed this for high earners. Beginning in 2026, if a worker's wages from the employer exceeded a set threshold in the prior year, their catch-up contributions must be made on a Roth basis. Roth means the money goes in after tax, so there is no deduction today, but qualified withdrawals in retirement come out tax-free. The saver can still make the catch-up, they just lose the choice to do it pre-tax.
Here is the line that decides who is affected. The rule applies to a worker whose FICA wages from that employer in the prior year were more than $150,000.
A few details matter. The CPA Journal notes that IRS Notice 2025-67 sets the wage threshold at $150,000 for 2025 to determine whether 2026 catch-ups must be Roth, and the figure is indexed going forward. It is based on wages from the specific employer sponsoring the plan, not total income from all sources. And it looks at the prior year, so 2026 treatment depends on 2025 wages. Someone under the threshold can still choose Roth voluntarily, but they are not forced to.
The numbers changed for 2026, so get these straight. Per the IRS catch-up contribution rules and Notice 2025-67, the 2026 figures are:
That super catch-up is its own wrinkle. Workers in the 60-to-63 window get a larger catch-up amount, and for high earners in that band, that larger amount also has to go in as Roth. So the biggest catch-up contributions are exactly the ones most likely to be forced into Roth treatment.
There is a little breathing room built in. The final regulations technically apply starting in 2027, but plans are expected to operate in good-faith compliance with the mandatory Roth rule during 2026. As Newfront's summary of the final rules explains, that means 2026 is the year to have your process working, even though the formal enforcement date is 2027.
There is also a plan document deadline to track. Plans generally need to be amended to reflect the mandatory Roth catch-up rules, and that amendment has its own timeline. Missing the operational setup is the bigger near-term risk, since a plan that cannot process Roth catch-ups for affected employees in 2026 has a real problem.
This rule is deceptively hard on the back end. To follow it, a plan and its payroll system have to do a few things together.
First, the plan has to offer a Roth option at all. A plan that only ever allowed pre-tax deferrals cannot suddenly route high earners' catch-ups to Roth, so plans without a Roth feature had to add one. Second, payroll has to identify which employees crossed the $150,000 prior-year wage line and flag their catch-ups for Roth treatment automatically. Third, the systems have to handle the 60-to-63 super catch-up correctly for those same high earners. Get any of those wrong and contributions land in the wrong tax bucket, which is a mess to unwind. Workers tracking their own basis across pre-tax and Roth amounts may also lean on Form 8606 concepts when they file.
The work is operational, so start there rather than with the paperwork.
Confirm the plan actually offers a Roth contribution option, and add one if it does not. Work with payroll to build the prior-year wage flag so affected employees are caught automatically. Test that the 60-to-63 super catch-up processes correctly and routes to Roth for high earners. Communicate the change to affected employees before 2026 deferrals start, because a worker expecting a pre-tax deduction will be surprised. And track the plan amendment deadline so the document keeps pace with operations.
For business owners and the self-employed running their own plans, the same logic applies, and our guide to Roth solo 401(k) limits covers how the Roth side works in a one-person plan.
This is precise, deadline-bound compliance work that touches payroll, the plan, and employee communications at once. Madras Accountancy supports US CPA firms and their clients on retirement plan compliance and payroll setup, so the mandatory Roth catch-up runs correctly from the first 2026 paycheck.
What is the mandatory Roth catch-up rule? Starting in 2026, workers age 50 and older whose prior-year wages from their employer exceeded $150,000 must make their 401(k) catch-up contributions on a Roth, after-tax basis instead of pre-tax. It comes from SECURE 2.0.
Who does the Roth catch-up requirement apply to? Employees whose FICA wages from the plan-sponsoring employer were more than $150,000 in the prior year. The test uses wages from that specific employer, not total income, and the threshold is indexed going forward.
What are the 2026 catch-up contribution limits? For 2026, the elective deferral limit is $24,500, the regular age-50 catch-up is $8,000, and the enhanced catch-up for ages 60 to 63 is $11,250. High earners must make these catch-ups as Roth.
What is the super catch-up for ages 60 to 63? It is a larger catch-up contribution, $11,250 for 2026, available to workers aged 60 through 63. For high earners in that age band, this larger catch-up must also be made on a Roth basis.
When does the mandatory Roth catch-up rule take effect? The requirement applies for 2026, with plans expected to operate in good-faith compliance that year. The final regulations formally apply starting in 2027, and plans must be amended within the required timeline.
Can lower earners still make pre-tax catch-up contributions? Yes. The mandatory Roth rule only applies to workers over the $150,000 prior-year wage threshold. Employees under it can still choose pre-tax catch-ups, or elect Roth voluntarily if the plan allows.
What happens if a plan does not offer a Roth option? A plan without a Roth feature cannot comply, because affected high earners' catch-ups have to go to Roth. Such plans needed to add a Roth contribution option to let those employees continue making catch-up contributions.
What should employers do to prepare? Confirm the plan offers Roth contributions, set up payroll to flag employees over the $150,000 prior-year wage line, test the 60-to-63 super catch-up, communicate the change to affected staff, and track the plan amendment deadline.
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