Roth Catch Up final regs

The IRS released the unpublished version of the final catch up regulations which should be published in tomorrow's Federal Register.

For 94 pages of reading enjoyment for those who can wait, see here https://public-inspection.federalregister.gov/2025-17865.pdf

The final version should be here tomorrow https://www.federalregister.gov/public-inspection/2025-17865/catch-up-contributions

One interesting right up front is

"Applicability date: These regulations generally apply with respect to contributions
in taxable years beginning after December 31, 2026. However, see
§§1.401(k)-1(f)(5)(iii), 1.414(v)-1(i)(2), and 1.414(v)-2(e)(2) and the Applicability Dates
section later in this preamble for additional details regarding applicability dates."

Observe that the rule’s applicability dates refer to “taxable years”—a participant’s tax year.

"The final regulations do not extend or modify the administrative transition period provided under Notice 2023-62."

25 minutes ago, Peter Gulia said:

"The final regulations do not extend or modify the administrative transition period provided under Notice 2023-62."

So.... They don't need to extend or modify the administrative transition period because there is now a final rule with an applicability date? 

@RatherBeGolfing, I have been trying to figure that out all day.

The statute, Internal Revenue Code § 414(v)(7), applies to contributions in a participant’s tax year that began or begins after December 31, 2023.

(The Internal Revenue Service announced a nonenforcement for 2024 and 2025.)

The Treasury’s rule “applies [assuming the rule is published on September 16 and becomes effective on November 15] to contributions in taxable years beginning after December 31, 2026.” For most participants that means 2027.

“For prior taxable years [including 2026], a reasonable, good faith interpretation standard applies with respect to [I.R.C. §] 414(v)(7).”

A Treasury rule might interpret the statute, but is not itself the source of the law.

So, this means the mandatory catch-up rule must be compiled with for taxable years on or after 12/31/25. But for the 2026 taxable year, plans can use a reasonable, good faith interpretation of the statute. Then, for taxable years after 12/31/26, the final regs must be complied with. Correct? 

Lots of confusion on the web about this.

In addition to the Bakers’ BenefitsLink posting, here in context is today’s Federal Register publication of the rulemaking.

https://www.govinfo.gov/content/pkg/FR-2025-09-16/pdf/2025-17865.pdf

This states the effective date (not any applicability date) is November 17. (When I counted 60 days from September 16, I didn’t look at a calendar and so didn’t see that November 15 is a Saturday.)

1 hour ago, Ian said:

So, this means the mandatory catch-up rule must be compiled with for taxable years on or after 12/31/25. But for the 2026 taxable year, plans can use a reasonable, good faith interpretation of the statute. Then, for taxable years after 12/31/26, the final regs must be complied with. Correct? 

Lots of confusion on the web about this.

Yea, I'm seeing a lot of people say that the final rule permits or allows a plan to incorporate Roth cacth up prior to the applicability date using a reasonable, good faith interpretation.  I have yet to see anyone say that you must comply with the statute prior to the applicability date.

It sure sounds like you would still have to comply though... 

Am I interpreting that we're counting the 2026 comp for the requirement, but not impacting contributions until 2027?

If a plan followed the IRS’s nonenforcement announcement, 2026 is the first year to apply a provision that a higher-wage participant’s age-based catch-up must be a Roth contribution.

Whether a participant is § 414(v)(7)-burdened for 2026 turns on 2025 Social Security wages.

Do BenefitsLink neighbors concur in my estimate that § 414(v)(7)’s $145,000 will be inflation-adjusted to $150,000 for 2025 Social Security wages that drive whether a participant is § 414(v)(7)-burdened for 2026?

I agree that $150,000 is likely. The IRS has already said that had plans been forced to follow this rule in 2025, the 2024 limit would have stayed at $145,000. We won't know for sure until the COLA adjustments are published later this year.

I need someone to explain it to me like I'm 5...   Is the Roth Catch Up provision no longer required in 2026 and it's now delayed until 2027?  After sending out letters of explanation and next steps to my clients not too long ago it sounds like I'm now going to tell them "just kidding - don't have to do it until 2027".

The tax-law condition that a higher-wage participant’s age-based catch-up deferrals must be Roth contributions (or not made) begins with 2026.

20 hours ago, LMK TPA said:

I need someone to explain it to me like I'm 5...   Is the Roth Catch Up provision no longer required in 2026 and it's now delayed until 2027?  After sending out letters of explanation and next steps to my clients not too long ago it sounds like I'm now going to tell them "just kidding - don't have to do it until 2027".

Ferenczy Benefits Law posted a flashpoint yesterday highlighting that the Roth catch-up mandate is still effective in 2026. 

Link to article 

Shoutout to @Ilene Ferenczy

*Edit to add that Spark also released a summary stating that good faith compliance is required for 2026.  

On 9/18/2025 at 5:50 AM, RatherBeGolfing said:

Ferenczy Benefits Law posted a flashpoint yesterday highlighting that the Roth catch-up mandate is still effective in 2026. 

Link to article 

Shoutout to @Ilene Ferenczy

*Edit to add that Spark also released a summary stating that good faith compliance is required for 2026.  

Thank you!