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IRS Releases Final Rules on Catch-Up Contributions

Sep 15, 2025, 05:00 by Jenny Gartman
The Department of the Treasury and the Internal Revenue Service (IRS) issued final rules implementing a SECURE 2.0 Act provision requiring that catch-up contributions made by certain higher-income participants be designated as after-tax Roth contributions. The final rules also provide guidance relating to increased catch-up contribution limits under the SECURE 2.0 Act for certain retirement plan participants, in particular employees between the ages of 60-63 and employees in newly established SIMPLE plans.

Final regulations differ from the proposed regulations
While the final regulations generally follow the proposed regulations, changes were made in response to comments received on the proposed regulations. 
The final regulations permit a plan administrator to aggregate wages received by a participant in the prior year from certain separate common law employers in determining whether the participant is subject to the Roth catch-up requirement.
Other changes relate to:
  • Correction of a failure to comply with the Roth catch-up requirement
  • Implementation of a deemed Roth election
  • Plans that cover participants in Puerto Rico.

The regulations are effective November 17, 2025.

Applicability dates

The Roth catch-up requirement rules generally apply to contributions in taxable years beginning after December 31, 2026. However, multiemployer plans, collectively bargained plans and certain governmental plans have a later applicability date. 

  • Collectively bargained plans: Contributions in the first taxable year that begins after the date on which the last collective bargaining agreement related to the plan that is in effect on December 31, 2025, terminates.
  • Multiemployer plans: The first taxable year beginning after the date on which the last collective bargaining agreement related to the plan that is in effect on November 17, 2025 terminates.
  • Governmental plans: Contributions in taxable years beginning after the later of the first taxable year beginning after December 31, 2026, or the first taxable year beginning after the close of the first regular legislative session of the legislative body with the authority to amend the plan that begins after December 31, 2025.

Early implementation is permitted for the Roth catch-up requirement in taxable years beginning before 2027 using a reasonable, good faith interpretation of statutory provisions. The final regulations do not extend or modify the administrative transition period provided under IRS Notice 2023-62, which generally ends on December 31, 2025.

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