The IRS has released final regulations offering guidance for retirement plans that allow participants who have reached 50 to make added elective deferrals considered as catch-up contributions.
These final regulations reflect statutory changes that the SECURE 2.0 Act of 2022 established such as the requirement that catch-up contributions made by certain catch-up eligible participants must be designated Roth contributions. The regulations impact participants in, beneficiaries of, employers maintaining, and administrators of certain retirement plans.
These rules amended the Income Tax Regulations under Section 414(v) of the Code, which lets a retirement plan permit catch-up eligible participants to make added elective deferrals that are catch-up contributions while establishing requirements relating to those contributions.
The amendments to Section 414(v) allow the changes to the catch-up contribution requirements for certain catch-up eligible participants under sections 109, 117, and 603 of Division T of the SECURE 2.0 Act.
The regulations also establish conforming amendments to the regulations under sections 401(k) and 403(b) of the Code that reflect section 603 of the SECURE 2.0 Act.
These regulations take effect on Nov. 17 and generally apply with respect to contributions in taxable years starting after Dec. 31, 2026.