On Friday, August 25, 2023, the IRS announced that the section of SECURE 2.0 with respect to Catch-Up Contributions, is being delayed until 2026. This provision stated that all employees who earned compensation greater than $145,000 in the prior year must have their 401(k) elective deferral catch-up contributions be designated as Roth. This was originally set to take effect January 1, 2024, but is now being pushed until 2026.
No action is required. Just a heads up that 401(k) elective deferral catch-up contributions are not required to be designated as Roth next year.
Read more helpful tax news here.
Learn more about our Tax Planning & Compliance services here.