IRS proposes rules on Roth catch-up mandate for high earners 

IRS proposed regulations provide much-needed guidance on the requirement that catch-up contributions by certain high-earning employees participating in 401(k), 403(b) and governmental 457(b) plans may be made only on a Roth basis (referred to in this article as the “Roth mandate”). Enacted as part of the SECURE 2.0 Act of 2022 (Div. T of Pub. L. No. 117-328), the Roth mandate applies to tax years starting after 2023. However, compliance with the mandate is on hold until 2026 after IRS announced a two-year administrative implementation period. The proposal largely incorporates — and expands upon — IRS’s interim guidance on the Roth mandate in Notice 2023-62. Plans may rely on the proposal for tax years before final regulations are effective. Comments are due by March 14.

The proposal also addresses SECURE 2.0’s higher “super catch-up” contribution limit for employees turning ages 60, 61, 62 or 63 during the year.

Click here to download the 8-page print-friendly PDF.