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Compliance September 15, 2025
Treasury, IRS Issue Final Regulations on Roth Catch-up Contributions
The statutory deadline has not been extended, but the rules will only be applied in 'good faith' in 2026.
Reported by Edward Rueda
Art by Alex Eben Meyer
The U.S. Department of the Treasury and Internal Revenue Service issued on Monday final regulations regarding after-tax, Roth source catch-up contributions that will take effect in 2027, clarifying previsions in the SECURE 2.0 Act of 2022.
Employees aged at least 50 years old who made at least $145,000 from their current employer in the prior year and make additional contributions to 401(k), 403(b) or governmental 457(b) retirement plans will have to make them as Roth contributions, rather than pre-tax contributions.
In 2025, individuals older than age 50 are permitted to contribute an additional $7,500, on top of the standard employee contribution of $23,500.
In addition, the regulations allow for employees aged 60 through 63 to make “super catch-up” contributions. Certain catch-up contributions in 403(b) plans will not be designated as Roth contributions, according to the IRS.
Originally, the IRS required compliance with the regulations by 2024, but in August 2023, the agency granted a two-year delay in the provision’s effective date, through December 31, 2025. While the deadline was not further extended, as some retirement industry groups had requested, retirement plans are allowed to follow the Roth catch-up rules next year on a “reasonable, good faith” basis.
“They pushed out the effective date of the regulation, which gives people time to figure out what they are doing for 2026 and as they go forward,” says David Levine, a principal in Groom Law Group. “This gives some relief for people trying to get their systems updated.”
Certain governmental plans and plans maintained under a collective bargaining agreement have later applicability dates, according to the IRS.
While the IRS announcement stated the final regulations “generally follow” previously proposed rules, some changes were made following the public comment period. For example, a plan administrator is now permitted to aggregate a participant’s wages from certain separate common law employers to determine whether the participant’s income meets the level requiring Roth catch-up contributions.
Other regulation changes included the timing for correcting: If a plan puts too much money into a Roth account, the plan administrator has until the end of the next plan year to fix it. Additionally, if an employee is no longer required to make Roth catch-up contributions due to loss in pay or a corrected W-2 tax form, the automatic Roth election must stop within a reasonable amount of time.
The final regulations are effective 60 days after publication in the Federal Register—approximately November 16.
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