In Notice 2023-62, the IRS addressed a technical error in the SECURE 2.0 Act that wouldn’t have allowed catch-up contributions to 401(k)s and similar plans after 2023.

Generally, taxpayers who’re age 50 or older are allowed to make additional “catch-up” contributions to employer-sponsored retirement plans such as 401(k)s. When Congress included a requirement in SECURE 2.0, signed into law at the end of 2022, that certain higher-income taxpayers make catch-up contributions only to Roth accounts, it inadvertently left out language needed to allow any catch-up contributions to employer-sponsored plans, whether pre-tax or Roth and regardless of income. The notice clarifies that catch-up contributions can be made after 2023.

The notice also pushes out the requirement that taxpayers who earned more than $145,000 (indexed for inflation) in Social Security wages the previous year be made on a Roth (after-tax) basis. The new rule was to go into effect in 2024, but plan administrators requested additional time to modify systems to implement the change. The IRS has extended the effective date to 2026.