Beginning in 2026, Section 603 of the SECURE 2.0 Act requires catch-up contributions to be treated as Roth (after-tax) for employees who are age 50 or older and earned $150,000 or more in prior-year FICA-subject wages.
No action is required if you do not have employees who will be age 50 or older in the upcoming year and earned $150,000 or more in prior-year FICA-subject wages.
This requirement applies only to employees who meet both of the following:
Employees who meet these criteria must have their catch-up contributions treated as Roth contributions. Pre-tax catch-up contributions are no longer permitted for these employees.
CoAd uses prior-year FICA wages to determine whether this requirement applies.
To review or update FICA wages:
Employee Profile > Deductions > Retirement Plan Deduction > FICA Wages Tracking
It begins in 2026. Section 603 of the SECURE 2.0 Act requires certain retirement plan catch-up contributions to be treated as Roth (after-tax) contributions based on employee age and prior-year earnings.
Only employees who meet both conditions: they will be age 50 or older in the upcoming calendar year, and they earned $150,000 or more in prior-year FICA-subject wages.
No. Employees who meet the criteria must have their catch-up contributions treated as Roth contributions, and pre-tax catch-up contributions are no longer permitted for them.
CoAd uses prior-year FICA wages. Those wages are automatically populated for employees who were paid through CoAd last year, and if prior-year data is unavailable, wages can be reviewed or entered manually.
Go to Employee Profile > Deductions > Retirement Plan Deduction > FICA Wages Tracking.
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