The 2026 Roth Catch-Up Rule for High Earners, Explained

The short answer: starting in 2026, if you’re 50 or older and your 2025 wages from your employer were more than $150,000, any catch-up contributions you make to that employer’s 401(k), 403(b), or governmental 457(b) plan must go in as Roth (after-tax) contributions. Your regular deferral can still be pre-tax. Only the catch-up piece changes, and you lose the current-year deduction on it in exchange for tax-free growth.

This rule comes from Section 603 of the SECURE 2.0 Act. It technically took effect earlier, but the IRS gave plans a transition period through the end of 2025 (Notice 2023-62). In September 2025, Treasury and the IRS issued final regulations on how the rule works (IR-2025-91). Here is who it affects and what to do.

The 2026 numbers

For 2026, IRS Notice 2025-67 sets these limits for 401(k), 403(b), and governmental 457(b) plans:

So someone 50 or older can defer up to $32,500 in 2026 ($24,500 + $8,000), and someone 60 through 63 can defer up to $35,750 ($24,500 + $11,250). If you’re over the wage threshold, the first $24,500 can still be pre-tax, but the catch-up amount must be Roth.

The age 60 to 63 “super catch-up” is also a SECURE 2.0 change. It started in 2025 and applies only in the years you turn 60, 61, 62, or 63. At 64, you go back to the regular age 50 catch-up.

Who the rule applies to

The test looks at one number: your wages for FICA purposes (Social Security and Medicare wages) from the employer that sponsors the plan, for the prior calendar year. For 2026 contributions, that means your 2025 wages. The final regulations say plans can use the FICA wages shown in Box 3 of your 2025 Form W-2.

A few details matter:

• It’s per employer. Wages from a different employer generally don’t count toward the test. The final regulations do let plan administrators combine prior-year wages from certain separate employers in some cases.
• New employees aren’t caught in their first year. If you had no wages from the employer in 2025, there are no prior-year FICA wages to test.
• The threshold is indexed. It was $145,000 in the statute and is $150,000 for the 2026 test. The IRS will update it in future years.

S corp owners: yes, it applies

If you own an S corporation and pay yourself a reasonable salary through payroll, that salary is FICA wages from the S corp. If your 2025 W-2 from your S corp showed Social Security wages over $150,000, any catch-up you make in 2026 to the company’s 401(k), including a Solo 401(k), has to be Roth.

Your S corp distributions aren’t wages, so they don’t count toward the test. That doesn’t mean you should set your salary around this rule. Salary has to be reasonable for the work you do, and it drives your retirement plan contributions, payroll tax, and the QBI deduction. The Roth catch-up rule is one more factor to weigh, not a reason to change pay on its own. Our article on reasonable compensation covers how the IRS looks at owner salary.

Partners and sole proprietors

Partners and sole proprietors don’t receive W-2 wages from their own business. Their earnings are self-employment income, which isn’t FICA wages. The final regulations say a participant who had no FICA wages from the plan sponsor for the prior year, such as a partner with only self-employment income, isn’t subject to the Roth catch-up requirement under that plan.

In practice, a sole proprietor with a Solo 401(k), or a partner in a partnership plan, can generally still choose pre-tax or Roth for catch-up contributions, whatever their income. Plan documents and testing rules still apply, so confirm with your plan provider.

What if your plan doesn’t offer Roth?

A plan isn’t required to add a Roth option. But under the final regulations, a plan without one can keep allowing catch-up contributions only for participants who aren’t subject to the rule. If you’re over the threshold and your plan has no Roth option, you may not be able to make catch-up contributions at all.

Many plans have added a Roth feature for this reason. The final regulations also let a plan treat a high earner’s catch-up election as a Roth election automatically, if the plan document says so. Check your 2026 enrollment materials or ask your plan administrator how your plan handles it.

When the final regulations apply

The statutory requirement applies now; the IRS transition period ended December 31, 2025. The final regulations themselves generally apply starting in 2027, with later dates for some governmental and collectively bargained plans. For 2026, plans must follow a reasonable, good faith reading of the law, and they may apply the final regulations early.

What to do

• Check your 2025 W-2. Look at Box 3 from each employer that sponsors a plan you contribute to. That number decides whether the rule applies to you in 2026.
• Confirm your plan has a Roth option. If it doesn’t and you’re over the threshold, ask whether catch-ups are still available to you.
• Plan for the tax. A Roth catch-up doesn’t reduce your taxable income. At the 2026 limits, that’s $8,000, or $11,250 at ages 60 to 63, that stays in your taxable income for the year.
• Look at the rest of your retirement picture. Pre-tax room may still be available through employer profit-sharing contributions or a cash balance plan. If you already want more Roth money, a mega backdoor Roth or a backdoor Roth IRA may fit.
• Don’t overlook the upside. Roth money grows tax-free and has no required minimum distributions during your lifetime, which can be valuable if you expect high income in retirement or plan to leave the account to heirs.

How we help

At Cannon & Brown Tax Advisors, retirement contributions are part of a year-round tax plan. We look at your owner salary, your plan design, and your projected income together, so the Roth catch-up rule fits into the bigger picture. Our technology keeps the numbers current, and your tax strategist reviews every recommendation. To see where you stand, start with a free tax analysis.

This article is educational and is not tax advice for your situation. Tax law may change, which may change these rules and numbers.

Sources

• IRS: Treasury, IRS issue final regulations on new Roth catch-up rule, other SECURE 2.0 Act provisions (IR-2025-91)
• IRS: Internal Revenue Bulletin 2025-40 (T.D. 10033, final catch-up regulations)
• IRS: Notice 2025-67, 2026 amounts relating to retirement plans and IRAs
• IRS: Notice 2023-62, guidance on Section 603 of the SECURE 2.0 Act
• IRS: Retirement topics, required minimum distributions (RMDs)
• IRS: Retirement topics, catch-up contributions