Overview
- Final regulations were published Sept. 16, 2025 and take effect Nov. 17, 2025, with mandatory Roth treatment required for catch‑ups beginning with the 2026 tax year and most provisions generally applying to contributions for tax years starting after Dec. 31, 2026.
- The $145,000 trigger is based on prior‑year Box 3 FICA wages from the plan sponsor and is indexed to inflation, with limited permissive aggregation across related employers and carve‑outs for some new hires and workers without W‑2 wages.
- Employers have a 2026 transition to operate under reasonable, good‑faith interpretations and must update plans and systems by Dec. 31, 2026 to preserve catch‑up access for affected employees.
- Administrative updates include a permitted deemed Roth catch‑up election, IRS‑approved correction methods (W‑2 correction or in‑plan Roth rollover), and a temporary safe harbor for dual‑qualified plans covering Puerto Rico participants.
- High earners age 50+ will no longer receive a pretax deduction for catch‑ups and may face higher current‑year taxes, while standard and age 60–63 “super” catch‑up limits remain available and will be Roth‑only for those over the threshold.