Under the SECURE 2.0 Act, employees who earn more than $150,000 in FICA wages in 2025 will be required to make catch-up contributions to their 401(k) plan as Roth contributions in 2026.
What You Need to Know
- Confirm with Your Payroll Provider – Ensure your payroll provider is aware of this new requirement and can process Roth catch-up contributions correctly.
- Mandatory Roth Contributions – Employees exceeding the $150,000 threshold must make their catch-up contributions as Roth, meaning contributions will be made with after-tax dollars and will not be tax-deductible.
- Cost of Living Adjustments – The $150,000 threshold may be adjusted in future years by the Internal Revenue Service.
- Excluded Employees – Those earning $150,000 or less are not subject to this requirement and may continue making traditional catch-up contributions as either pretax or Roth.
If you haven’t yet communicated with your payroll provider and any NTCA Savings Plan participants who may be affected by the Roth catch-up contribution requirement, please do so right away. In January 2026, NTCA will provide a simple web form to identify impacted employees. In the meantime, check out our Frequently Asked Questions for additional guidance.