The IRS and Treasury Department have issued proposed regulations to implement key provisions of the SECURE 2.0 Act concerning catch-up contributions for workplace retirement plans like 401(k)s. Catch-up contributions allow employees aged 50 and older to make additional contributions beyond standard limits. 

According to the IRS, the SECURE 2.0 Act made changes that are meant to encourage employees to contribute to their employers’ 401(k) or 403(b) plans. These changes lets companies offer small financial incentives to employees who participate in these retirement savings plans. If an employer offers such an incentive, it becomes part of the employee's income and is subject to regular tax withholding unless there is a specific exemption. 

Under the new rules, higher-income participants (those earning over $145,000) must make these contributions as after-tax Roth contributions starting in 2026. The proposed regulations provide guidance for plan administrators to comply with this requirement, incorporating feedback from Notice 2023-62 issued in Aug. 2023. 

The regulations also outline increased catch-up contribution limits for certain groups under the SECURE 2.0 Act. These include employees aged 60 to 63 and participants in newly established SIMPLE plans, enabling them to contribute more toward their retirement savings. 

The Treasury Department and IRS are seeking public input on these proposed rules. Stakeholders can submit comments through the Federal Register as outlined in the official proposal.