The mandatory Roth catch-up 2026 rule means a 401(k), 403(b) or governmental 457(b) participant aged 50 or older whose 2025 FICA wages from the employer sponsoring the plan were more than $150,000 can make 2026 catch-up contributions only as after-tax Roth deferrals. Everyone else keeps the choice between pre-tax and Roth catch-ups. A plan with no Roth feature cannot accept catch-up contributions from the affected group at all.
The requirement comes from Section 603 of the SECURE 2.0 Act, which added Section 414(v)(7) to the Internal Revenue Code. Final regulations were issued in September 2025, the IRS raised the wage threshold to $150,000 in Notice 2025-67, and 2026 is the first year plans must operate under the rule. This guide covers the mandatory Roth catch-up 2026 wage test, the current dollar limits, the deemed Roth election, what happens in plans without a Roth option, and the payroll work that makes it run.
A catch-up contribution is the extra elective deferral a participant aged 50 or older can make above the regular annual deferral limit. Before 2026, every catch-up-eligible participant could choose pre-tax treatment, reducing current taxable income.
The statute changes that choice for higher earners. Under 26 U.S.C. § 414(v)(7)(A), catch-up contributions are allowed for an eligible participant whose wages "(as defined in section 3121(a)) for the preceding calendar year from the employer sponsoring the plan exceed $145,000" only if those additional deferrals are designated Roth contributions. The $145,000 figure is indexed for inflation, which is why the 2026 test uses $150,000.
Roth treatment means the money goes in after tax. The participant gets no deduction in the year of the contribution, and qualified distributions later come out tax-free. The participant can still save the full catch-up amount; only the tax treatment is fixed.
The broader set of retirement changes in the same law is covered in our overview of the SECURE 2.0 Act and what it means for retirement savings.
The test looks back one year. For 2026 contributions, the plan checks 2025 wages. In Notice 2025-67, the IRS states that the Roth catch-up wage threshold for 2025, used under section 414(v)(7)(A) to decide whether 2026 catch-ups must be Roth, "is increased from $145,000 to $150,000."
Four details decide who is caught by the test.
Which wages count. The final regulations measure wages under section 3121(a) "for purposes of the taxes imposed by sections 3101(a) and 3111(a)." Those are the Social Security tax sections, so the relevant figure is the employee's Social Security wages from the employer; the preamble ties this to the amount reported in Box 3 of Form W-2. Pre-tax 401(k) deferrals do not lower that figure. The employment tax table in section 15 of IRS Publication 15 treats elective deferrals to a 401(k) plan as generally exempt from income tax withholding but taxable for Social Security and Medicare.
Which employer counts. The test uses wages from the employer sponsoring the plan, generally the participant's common law employer. Wages from a former employer or a second job do not count. The final rules let a plan aggregate wages from related employers in a controlled group or from a common paymaster arrangement if the plan document says so.
The threshold must be exceeded. A participant must have wages that exceeded the threshold. Someone with exactly $150,000 of 2025 FICA wages is outside the rule for 2026.
No FICA wages, no requirement. The regulations say an individual who had no FICA wages from the sponsoring employer in the preceding year is not subject to the Roth catch-up requirement for the current year. The preamble gives the example of a partner who had only self-employment income. A new hire who joins in 2026 is also outside the rule for 2026, since there were no 2025 wages from that employer.
The requirement does not reach SEP arrangements or SIMPLE IRA plans. The regulations quote section 414(v)(7)(C), which provides that section 414(v)(7)(A) "does not apply to SEP arrangements or SIMPLE IRA plans." Owners comparing those plan types can use our guide to SEP IRA vs SIMPLE IRA for small businesses.
The IRS announced the 2026 figures in IR-2025-111 on November 13, 2025, alongside Notice 2025-67.
| Limit (401(k), 403(b), governmental 457(b)) | 2025 | 2026 |
|---|---|---|
| Regular elective deferral limit | $23,500 | $24,500 |
| Catch-up, age 50 and older | $7,500 | $8,000 |
| Higher catch-up, ages 60 to 63 | $11,250 | $11,250 |
| Roth catch-up wage threshold (prior-year FICA wages) | $145,000 (2024 wages) | $150,000 (2025 wages) |
The release states that the general catch-up limit for employees aged 50 and over "is increased to $8,000, up from $7,500 for 2025," and that for employees aged 60, 61, 62 and 63 the higher catch-up limit "remains $11,250" for 2026.
The ages 60 to 63 catch-up is $3,250 larger than the regular catch-up, and it is fully subject to the Roth rule. A participant in that age band who crossed the wage line in 2025 must route the entire $11,250 to Roth. The largest catch-up contributions are therefore the ones most likely to lose pre-tax treatment.
The table below applies the 2026 limits to five participants in the same 401(k) plan, which offers a Roth deferral option. Wages are 2025 Social Security wages from the plan sponsor. The tax figures assume a 24% marginal federal rate for illustration only.
| Participant | Age in 2026 | 2025 FICA wages from employer | Subject to Roth rule | 2026 catch-up available | Total 2026 deferral room | Catch-up that must be Roth |
|---|---|---|---|---|---|---|
| Dana | 61 | $162,000 | Yes | $11,250 | $35,750 | $11,250 |
| Mark | 58 | $172,000 | Yes | $8,000 | $32,500 | $8,000 |
| Luis | 55 | $148,000 | No | $8,000 | $32,500 | $0 |
| Priya | 52 | $150,000 | No (equal, not above) | $8,000 | $32,500 | $0 |
| Ana | 62 | $0 (hired in 2026) | No | $11,250 | $35,750 | $0 |
Dana can still put $24,500 of regular deferrals in pre-tax and add $11,250 of Roth catch-up, for $35,750 in total. At a 24% marginal rate, losing the deduction on $11,250 raises her 2026 federal income tax by $2,700 compared with a pre-tax catch-up. Mark's $8,000 Roth catch-up costs $1,920 of current federal tax at the same rate. In both cases that tax is paid now in exchange for tax-free qualified withdrawals later.
Luis and Priya fall at or under the threshold, so each can choose pre-tax or Roth for the catch-up. Ana has no 2025 wages from this employer, so she keeps the choice for 2026 even though she is a high earner. Her status for 2027 will depend on her 2026 wages under the indexed threshold then in effect.
If the same plan had no Roth option, Mark's maximum catch-up would be $0 and his 2026 deferral room would stop at $24,500.
SECURE 2.0 does not force employers to add Roth deferrals. The consequence of skipping them is that affected participants lose catch-ups entirely. The final regulations provide that if a plan "does not include a qualified Roth contribution program," then for a participant subject to the Roth catch-up requirement "the maximum amount of catch-up contributions permitted under section 414(v) is $0."
A plan without Roth can still let participants under the wage threshold make pre-tax catch-ups. Most sponsors with any high-earning employees over 50 add a Roth feature, since otherwise those employees, often owners and senior staff, lose $8,000 to $11,250 of annual savings room. Employers reviewing plan design for owners may also want to read our guides on cash balance plan contribution limits for 2026 and the mega backdoor Roth in 2026, which interact with the same deferral limits.
Getting a separate Roth election from every affected employee is slow. The final regulations allow a shortcut. A plan may provide that an employee subject to the Roth catch-up requirement "is deemed to have irrevocably designated" catch-up deferrals as Roth contributions.
Three conditions attach to the deemed election, per the regulations:
In practice the deemed election lets payroll switch deferrals above the regular $24,500 limit to Roth automatically for flagged employees, with no new paperwork from those employees. The regulations also describe Form W-2 and in-plan Roth rollover methods for correcting a pre-tax deferral that should have been Roth, so payroll errors can be fixed after the fact.
Several dates overlap, and they are easy to confuse.
The statute's Roth catch-up requirement was originally scheduled for 2024. The IRS then granted an administrative transition period in Notice 2023-62 that ran "until taxable years beginning after December 31, 2025." The final regulations do not extend it. As a result, 2026 is the first year plans must apply the rule.
The final regulations, T.D. 10033, "are effective on November 17, 2025," and they "generally apply with respect to contributions in taxable years beginning after December 31, 2026." For earlier years, which means 2026 for most plans, a reasonable, good faith interpretation of the statute is the standard. The IRS described the same split in news release IR-2025-91 of September 15, 2025. Plans may adopt the final regulations early.
Collectively bargained plans and governmental plans receive later applicability dates tied to the expiration of the bargaining agreement or the next legislative session. The deadline to amend plan documents for the SECURE 2.0 catch-up provisions generally is December 31, 2026, with further extensions for certain collectively bargained, governmental, 403(b) and governmental 457(b) plans.
As of October 2026, the practical position is this: the operational rule applies to 2026 catch-ups now, the good-faith standard governs how plans interpret it this year, and the detailed regulations become binding for most plans on January 1, 2027.
The rule depends on prior-year wage data, so most of the work sits in payroll. A practical sequence for the rest of 2026 and the 2027 cycle:
Roth deferrals show up on Form W-2 under their own Box 12 code, so reporting must match the plan's records; our article on the 2026 Form W-2 redesign and new Box 12 codes covers the current form. The Roth catch-up flag also belongs in the annual cycle of a payroll compliance checklist for 2026, and misrouted deferrals are one of the common payroll mistakes small businesses make.
Self-employed owners with one-participant plans have no FICA wages from the business when they are sole proprietors or partners, so the rule generally does not reach their catch-ups. Owners of an S corporation who take W-2 salary are a different case, since their wages from the corporation do count. Our guide to Roth solo 401k contribution limits explains how Roth deferrals work in a one-person plan.
Who is subject to the mandatory Roth catch-up rule in 2026? Participants aged 50 or older whose 2025 FICA wages from the employer sponsoring the plan were more than $150,000. Wages from other employers do not count unless the plan aggregates related employers, and people with no FICA wages from the sponsor in 2025 are not subject.
What are the 2026 catch-up contribution limits? For 401(k), 403(b) and governmental 457(b) plans, the regular deferral limit is $24,500, the catch-up for age 50 and older is $8,000, and the higher catch-up for ages 60 to 63 is $11,250.
What happens if my employer's plan has no Roth option? If you are over the wage threshold, your maximum catch-up contribution is $0 under the final regulations. You can still make regular deferrals up to $24,500. Participants under the threshold can continue to make pre-tax catch-ups.
Is 2026 enforced, or is it a transition year? The requirement applies to 2026 catch-ups, since the Notice 2023-62 transition period ended with 2025. During 2026, plans are judged on a reasonable, good faith interpretation of the statute, and the final regulations generally apply from 2027.
Does the Roth catch-up rule affect my regular deferrals? No. The regular $24,500 of deferrals can stay pre-tax. Only the catch-up amount above that limit must be Roth for participants over the threshold. Keep records of Roth amounts, since basis tracking matters later for forms such as Form 8606 when Roth money moves to an IRA.
Madras Accountancy supports US CPA firms and their business clients with payroll processing, retirement plan contribution reconciliation and year-end W-2 review, so wage-based rules like the Roth catch-up requirement are applied from the right data. To discuss support for your firm or clients, contact our team.
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