Mandatory Roth Catch-Up Contributions Over $150K in 2026
Key Takeaways
- Savers age 50 and older whose prior-year wages from the plan-sponsoring employer exceed the threshold must make workplace catch-ups as Roth, not pre-tax.
- The statute set the threshold at $145,000 and indexes it. IRS Notice 2025-67 raised it to $150,000, so 2026 catch-ups are tested against more than $150,000 of 2025 wages from that employer.
- The requirement is live now. The transition period under IRS Notice 2023-62 ended December 31, 2025, and the final regulations issued in September 2025 did not extend it.
- The test looks at wages reported by the employer sponsoring the plan, not household income, not adjusted gross income, not self-employment earnings. The rule covers 401(k), 403(b), and governmental 457(b) plans; IRA catch-ups follow separate rules.
- Losing the pre-tax treatment isn't automatically bad, but it changes the tax-year math your savings plan may be built around.
If you're 50 or older and still working, the catch-up contribution has probably been one of the most reliable tax breaks in your plan. You put an extra amount into the 401(k) on top of the regular deferral limit, and that money stayed out of your taxable income for the year.
SECURE 2.0 changed the tax treatment of that catch-up for one group of savers. If your wages from the employer sponsoring your plan were above a set threshold in the prior year, the catch-up can no longer go in pre-tax. It has to be a designated Roth contribution, taxed in the year you make it.
Congress wrote that threshold into the law as $145,000, but it's indexed annually. For 2026 the operative number is $150,000, set by IRS Notice 2025-67 and measured against your 2025 wages.
This isn't a rule that arrives someday. It's in force for the 2026 taxable year, and narrower than most people assume. One note: the address of this page still carries $145,000, the base figure written into the statute, because we kept the original URL intact.
In this guide, you'll see:
- What the mandatory Roth catch-up rule actually requires
- Who the $150,000 wage test actually captures
- What it does to your tax diversification
- Whether losing the pre-tax treatment is actually a problem for you
Table of Contents
| Figure | Amount | Source |
|---|---|---|
| Statutory base threshold | $145,000 | Written into the statute |
| 2026 operative threshold | $150,000 | IRS Notice 2025-67, measured against 2025 wages |
What the Rule Actually Requires
Under SECURE 2.0 section 603, a participant age 50 or older whose prior-year wages from the plan-sponsoring employer exceeded the applicable threshold may only make catch-up contributions to that plan on a Roth basis. The amount is unchanged.
What changes is the tax character: instead of staying out of your taxable income this year, the contribution is made with after-tax dollars, and qualified withdrawals of it and its growth come out tax-free later.
Two details matter. First, $145,000 is a statutory base indexed under section 414(v)(7)(E). Notice 2025-67 raised the Roth catch-up wage threshold used to test 2026 contributions from $145,000 to $150,000. Confirm the published figure each year.
Second, the timing. The statute made the requirement effective for taxable years beginning after December 31, 2023. IRS Notice 2023-62 then created an administrative transition period during which a catch-up counted as satisfying the rule even if it wasn't Roth. That period ended December 31, 2025. The final regulations (T.D. 10033, published at 90 FR 44527 on September 16, 2025) did not extend it. Those regulations formally apply to contributions in taxable years beginning after December 31, 2026, and until then plans operate under a reasonable, good faith interpretation of the statute. So the requirement is running right now, for 2026. Genuinely later dates exist only for governmental and collectively bargained plans, so ask your administrator where yours stands.
Because this moves a tax break out of your highest-earning years, it belongs in your retirement tax planning for 401(k) and IRA millionaires.
Who the $150,000 Wage Test Actually Captures
The most common misunderstanding is what income the threshold measures. It's not household income, not adjusted gross income, not your total compensation across every source.
The final regulations point to the Social Security wages the employer sponsoring the plan reported for you in the prior year, Box 3 of your W-2. That produces counterintuitive results.
A couple with $400,000 of combined household income, where neither spouse individually crossed the threshold at their own employer, isn't captured. Nor, generally, is someone who changed jobs and had no prior-year wages from the new employer, or a partner or sole proprietor with self-employment income rather than FICA wages.
Two caveats keep this from being a clean per-employer test. For 2026, the good faith standard lets a plan measure Medicare wages, Box 5, instead of Social Security wages. Box 5 is uncapped, so a saver near the line can be captured under one plan's method and not another's. And counting wages employer by employer is a default, not an absolute: the regulations let a plan aggregate wages paid through a common paymaster or by other members of the same controlled group.
You can't defer your way under the line. Pre-tax elective deferrals don't reduce the Social Security or Medicare wages this test measures.
One thing you can't do is defer your way under the line. Pre-tax elective deferrals are excluded from gross income under section 402(g)(1)(A) rather than deducted from it, and that exclusion doesn't reduce your Social Security or Medicare wages. Contributing more won't move the W-2 figure this test measures.
So check your prior-year W-2 against the applicable threshold. The catch-up is only one layer on top of the annual contribution limits and how to use them.
What It Does to Your Tax Diversification
For savers captured by the rule, a slice of annual savings that used to land in the tax-deferred column now lands in the tax-free column. That's not a loss, just a change of bucket, and a household carrying a large pre-tax 401(k) may need exactly that, since required minimum distributions are calculated off pre-tax balances.
Where it stings is current-year cash flow, because an after-tax contribution costs more out of pocket for the same dollar in the account. Map where every savings dollar lands across the three tax buckets your savings can sit in, then decide whether the forced Roth fills a gap or crowds out something you needed pre-tax.
Is Losing the Pre-Tax Treatment Actually a Problem?
It depends on your marginal rate today versus the rate that applies when the money comes out. If you're in a high bracket now and expect a meaningfully lower one in early retirement, the pre-tax treatment was probably worth more.
If your pre-tax balance is large enough that required minimum distributions may push you into a similar or higher bracket, the Roth treatment may be better, even though it feels like a tax increase now.
Consider a hypothetical saver, age 55, in a 32% federal marginal bracket, making the full $8,000 catch-up allowed for 2026.
| Treatment | Tax Impact This Year | Tax Impact at Withdrawal |
|---|---|---|
| Pre-tax (unavailable above threshold) | ~$2,560 off this year's tax bill | Taxable as ordinary income |
| Roth (required above threshold) | No reduction; full $8,000 after tax | Qualified withdrawals tax-free |
Hypothetical example for illustration only. Results are not guaranteed and depend on individual circumstances.
Neither outcome is universally better, which makes this a projection question rather than a rule of thumb. It's the same tradeoff at the center of paying tax now versus paying it later, applied to a slice of savings you no longer choose the treatment for. What you still control is how much goes into the plan, how your withholding is set, and how the rest of your contributions balance the buckets.
Who has to make Roth catch-up contributions?
Participants age 50 and older whose prior-year Social Security wages from the plan-sponsoring employer exceeded the applicable threshold. For 2026 that threshold is $150,000 of 2025 wages, set by IRS Notice 2025-67; the $145,000 in this page's address is the statutory base and was the operative figure for 2025. The requirement is in force now, because the transition period under Notice 2023-62 ended December 31, 2025. If your prior-year wages from that employer were below the figure, you can generally still make pre-tax catch-up contributions.
Does the $150,000 threshold use my household income?
No. The test uses the wages the specific employer sponsoring your plan reported for you for the prior year, measured per person. Combined household income, investment income, and self-employment earnings are not part of it. Wages are generally counted employer by employer, though a plan may aggregate wages paid through a common paymaster or by other members of the same controlled group.
What happens if my 401(k) does not offer a Roth option?
A plan that does not offer designated Roth contributions cannot accept the required Roth catch-up, so affected participants may not be able to make catch-up contributions to that plan at all until the employer adds the feature. Raise it with your plan administrator or HR well before year end.
Can I still make pre-tax catch-up contributions to an IRA?
The mandatory Roth catch-up rule applies to 401(k), 403(b), and governmental 457(b) plans, not to IRAs. IRA catch-up contributions follow their own limits, and whether a traditional IRA contribution is deductible depends on your income and whether you or a spouse are covered by a workplace plan.
Plan Around the Mandatory Roth Rule, Not Against It
Whether this rule helps or hurts your plan depends on your bracket now versus later, not on whether you like the word "mandatory."
If you want help mapping how the forced Roth catch-up fits your broader tax picture, see how retirement tax planning works for high-earning savers.
This content is for educational purposes only and is not investment, tax, or legal advice.
