The IRS recently released final regulations addressing several SECURE 2.0 Act provisions relating to catch-up contributions. 

The SECURES 2.0 Act amended the Tax Code to require that employees aged 50 or older with prior-year FICA wages exceeding $145,000 (indexed for inflation) make catch-up contributions as after-tax Roth contributions for taxable years beginning after December 31, 2023. The law also increased the catch-up contribution limit for participants ages 60 through 63 to 150% of the standard limit, effective for taxable years beginning after December 31, 2024.

For SIMPLE plans, the catch-up limit rose to 110% of the regular limit for certain eligible employers beginning after December 31, 2023, and then to 150% for SIMPLE participants in the 60-63 age group beginning after December 31, 2024.

If any participant is subject to the Roth catch-up requirement, all catch-up eligible participants must be allowed to make Roth catch-up contributions. SECURE 2.0 provided a two-year administrative transition period for 2024 and 2025, during which plans will not be penalized for noncompliance with the Roth catch-up requirement, allowing time for system updates and compliance adjustments.

Learn more: https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-on-new-roth-catch-up-rule-other-secure-2point0-act-provisions.