August 30, 2023

IRS Pushes Roth-Only Catch-Up Contribution Deadline to 2026

As you may know, the SECURE 2.0 Act’s measure allowing older taxpayers to make additional “catch-up” contributions to 401k and similar retirement plans included a provision limiting certain high-wage earners ($145,000 or more) to after-tax Roth contributions only. This was originally going to be effective in 2024 and would make the catch-up portion of the contribution non-deductible in the year made.

Now, in response to compliance difficulties reported by plan administrators and record-keepers, the IRS has issued new guidance that pushes the deadline for adding Roth catch-up contributions until 2026.

As you might expect, the announcement came as very welcome news to employers and plan providers who had been struggling to implement the Roth-only requirement by year’s end. While many issues remain unresolved, the two-year extension gives everyone involved some much-needed breathing room – at least, until other changes are made.

If you’d like more insight into this and other tax-related matters, our advice, as always, is to contact your Weiss tax professional. That’s why we’re here.

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