The 401k Roth catch-up 2026 mandate — a SECURE 2.0 provision that had been delayed — takes full effect January 1, 2026. Participants age 50 or older whose prior-year FICA wages from the plan’s sponsoring employer exceeded $150,000 can no longer make pre-tax catch-up contributions. Those contributions are now Roth-only. If the plan doesn’t offer a Roth option, affected participants lose catch-up eligibility entirely.
That operational consequence is the most significant change for plan administrators and the CPAs advising them this year. The 2026 contribution limits also moved, and the foundational rules on plan design, vesting, and nondiscrimination testing remain as relevant as ever.
401k Roth Catch-Up 2026: Contribution Limits
Per IRS Notice 2025-67 and the IRS announcement on 2026 retirement plan limits, the elective deferral limit under Section 402(g)(1) increased from $23,500 to $24,500. The Section 415(c) total contribution limit rose to $72,000.
| Limit | 2025 | 2026 |
|---|---|---|
| Employee elective deferral (Sec. 402(g)) | $23,500 | $24,500 |
| Total contributions, employee + employer (Sec. 415(c)) | $70,000 | $72,000 |
| Catch-up, age 50+ (Sec. 414(v)) | $7,500 | $8,000 |
| Super catch-up, ages 60-63 (SECURE 2.0) | $11,250 | $11,250 |
| Compensation limit (Sec. 401(a)(17)) | $350,000 | $360,000 |
| HCE threshold (Sec. 414(q)) | $160,000 | $160,000 |
Participants age 50 or older can contribute up to $32,500 for 2026, combining the standard deferral and the $8,000 catch-up. Those turning 60, 61, 62, or 63 during 2026 qualify for the SECURE 2.0 super catch-up of $11,250, bringing their total to $35,750. The super catch-up replaces the standard $8,000 catch-up for that age group rather than adding to it.
The compensation cap for calculating employer and employee contributions is $360,000 for 2026. Contributions based on compensation above that figure don’t qualify for the plan.
The 401k Roth Catch-Up 2026 Mandate: What Takes Effect January 1
This provision applies to 401(k), 403(b), and governmental 457(b) plans. It does not apply to SIMPLE plans or governmental 457(b) catch-ups made under the special pre-retirement catch-up provision.
The mechanics: a participant age 50 or older whose prior-year FICA wages from the sponsoring employer exceeded $150,000 is required to make catch-up contributions on a Roth basis. The relevant figure is the employee’s 2025 FICA wages reported in Box 3 of their W-2. Pre-tax catch-up contributions are no longer available to this group starting January 1, 2026.
The $150,000 threshold is indexed for inflation in future years. For 2026, the 2025 W-2 Box 3 figure is the test.
401k Roth Catch-Up 2026: The Plan Amendment Problem
If a plan doesn’t currently offer a designated Roth contribution option, affected participants simply can’t make catch-up contributions at all. The plan has to be amended to add a Roth feature before those contributions become available.
Plans that haven’t made that amendment by January 1, 2026 are leaving affected high earners without catch-up access for the period the plan remains unamended. That’s a meaningful benefit gap for participants who have been relying on catch-up contributions as part of their retirement savings strategy.
Plan sponsors working with advisors and third-party administrators on these amendments have to account for lead time on plan document updates, participant notices, and payroll system changes.
Plan Types and Design Rules
Traditional 401(k)
Employees defer a portion of compensation on a pre-tax basis. Employer contributions can be discretionary matching, nonelective, or both, subject to a vesting schedule. Traditional plans run annual nondiscrimination testing covered in the next section.
Safe Harbor 401(k)
Plans under IRC Sections 401(k)(12) or 401(k)(13) are exempt from the annual ADP and ACP nondiscrimination tests. The tradeoff is a mandatory employer contribution that vests immediately and advance notice to participants before each plan year.
Two standard safe harbor formulas:
- Basic match: 100% of the first 3% of deferred compensation, plus 50% of the next 2%
- Nonelective: 3% of compensation for all eligible employees regardless of whether they defer
Plans with automatic enrollment under Section 401(k)(13) are Qualified Automatic Contribution Arrangements (QACAs) and carry slightly different matching requirements.
SIMPLE 401(k)
Available to employers with 100 or fewer employees who received at least $5,000 in compensation in the prior year. The elective deferral limit for SIMPLE 401(k) plans is $17,000 for 2026, with a catch-up of $4,000 for participants age 50 or older. These plans aren’t subject to ADP or ACP testing, but employer contributions vest immediately and the plan can’t be combined with other qualified plans of the employer.
401k Roth Catch-Up 2026 and Nondiscrimination Testing: ADP and ACP
Traditional 401(k) plans run two tests annually. The Actual Deferral Percentage (ADP) test measures whether elective deferrals by highly compensated employees (HCEs) are proportional to those of non-highly compensated employees (NHCEs). Matching contributions get similar scrutiny under the Actual Contribution Percentage (ACP) test.
The HCE threshold for 2026 is $160,000 in prior-year compensation. Plans that fail either test have 12 months from the plan year-end to correct, typically by distributing excess contributions to HCEs or making qualified nonelective contributions (QNECs) to NHCEs.
Top-heavy plans carry additional requirements. A plan is top-heavy when key employee account balances exceed 60% of total plan assets, triggering a minimum 3% employer contribution for non-key employees and an accelerated vesting schedule.
Vesting Schedules
Elective deferrals are always 100% immediately vested. Employer matching and nonelective contributions can follow a schedule within statutory limits: a 6-year graded schedule or a 3-year cliff schedule for matching contributions. Safe harbor and SIMPLE 401(k) employer contributions vest immediately.
Roth Contributions and RMD Rules
Plans offering designated Roth contributions allow after-tax deferrals within the same $24,500 limit. Roth contributions grow tax-free and come out tax-free in qualified distributions. Any plan with a designated Roth option also has to offer pre-tax elective deferrals.
SECURE 2.0 eliminated lifetime RMDs for designated Roth 401(k) accounts starting in 2024, aligning with Roth IRA treatment. For traditional 401(k) balances, RMDs begin at age 73. The 401k Roth catch-up 2026 mandate makes adding a Roth feature operationally necessary for many plans — which also resolves the RMD alignment for affected participants.
CPE on 401k Roth Catch-Up 2026 and Retirement Plan Rules
MasterCPE covers 401(k) plan rules, SECURE 2.0 changes, and retirement plan compliance in its course catalog. Access courses through a MasterCPE unlimited subscription. MasterCPE is registered with NASBA as a sponsor of continuing professional education on the National Registry of CPE Sponsors.