SECURE 2.0 Section 603: Roth Catch-Up Contributions in CoAd Pay

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.

Do you need to do anything?

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.

Who is impacted

This requirement applies only to employees who meet both of the following:

• Will be age 50 or older in the upcoming calendar year
• Earned $150,000 or more in prior-year FICA-subject wages

What this means

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.

How CoAd supports compliance

• Prior-year wages are automatically populated for employees paid through CoAd last year.
• If prior-year data is unavailable, wages can be reviewed or entered manually.

Where to review FICA wages

To review or update FICA wages:

Employee Profile > Deductions > Retirement Plan Deduction > FICA Wages Tracking

Related resources

• SECURE 2.0 Update: Roth Catch-Up Contributions Changes

Frequently asked questions

When does the Section 603 Roth catch-up requirement start?

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.

Which employees are affected by the Roth catch-up rule?

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.

Can affected employees still make pre-tax catch-up contributions?

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.

How does CoAd determine whether an employee is affected?

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.

Where do I review or update an employee's FICA wages?

Go to Employee Profile > Deductions > Retirement Plan Deduction > FICA Wages Tracking.