IRS Grants 2-Year Delay for Roth Catch-Up Contribution Requirements

by The Moneta Retirement Team

On Friday, August 25 the IRS released guidance (Notice 2023-62) addressing Roth Catch-Up Contributions that were part of the SECURE 2.0 Act passed in December 2022.

The IRS guidance granted a 2-year delay in the effective date that would require catch-up contributions to be made on a Roth basis for anyone earning more than $145,000. This comes as a welcome relief to plan sponsors, payroll providers, and recordkeepers who need additional time and guidance to implement this new requirement effectively.

The good news for employees who are catch-up eligible and earning $145,000 or more is that they can continue to make catch-up contributions on a pre-tax basis through the end of 2025.

The IRS guidance also addressed the technical error in the SECURE 2.0 Act that inadvertently eliminated all catch-up contributions. The IRS guidance just released indicates pre-tax catch-up contributions can continue to be made regardless of income through the end of 2025.

The announcement is on the IRS site. To download the full PDF of the Notice, click here.


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