IRS issues proposed regs. on catch-up contributions

The IRS on Friday issued proposed regulations (REG-101268-24) on catch-up contributions under a 401(k) or similar retirement plan that generally are allowed for workers who are at least 50 years old. The proposed regulations would affect participants in, beneficiaries of, employers maintaining, and administrators of certain retirement plans.

The proposed regulations address catch-up contributions under several provisions of the SECURE 2.0 Act of 2022 (Division T of the Consolidated Appropriations Act, 2023, P.L. 117-328). These include proposed rules related to a provision requiring that catch-up contributions made by certain higher-income participants must be designated as after-tax Roth IRA contributions. 

Plan administrators are provided guidance in the proposed regulations to help them implement and comply with the new Roth catch-up rule. This guidance reflects comments the IRS received in response to Notice 2023-62, issued in August 2023.  

Guidance is also provided in the proposed regulations relating to the increased catch-up contribution limit under the SECURE 2.0 Act for certain retirement plan participants. Affected participants include employees between the ages of 60 and 63 and employees in newly established SIMPLE plans. 

A public hearing is scheduled for April 7.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.