In an announcement made in late August, the IRS said it would give people until 2026
to comply with new requirements for their Roth catch-up contributions.
This is good news for many Americans, as this transition period under the SECURE 2.0
Act passed in late 2022 means those making a higher income have some breathing
room – and the ability to make contributions as they see fit.
And plan participants who are 50 years old or older can keep making catch-up
contributions after 2023 – no matter how much money they make.
The change was discussed in the IRS Notice 2023-62, which talked about the new Roth
catch-up rule that was to begin in 2024. Section 603 of the SECURE 2.0 act addressed
such contributions.
With this 2-year delay, those earning more than $145,000 a year have some time and
can make Roth catch-up contributions on a pre-tax basis until the end of 2025.
In addition, the recently released guidance also corrected an error that would have cut
all catch-up contributions starting in 2024.
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