Part I

26 CFR 1.414(v)-1, 1.414(v)-2, 1.401(k)-1, and 1.403(b)-3

T.D. 10033

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1

Catch‑Up Contributions

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document sets forth final regulations that provide guidance for retirement plans that permit participants who have attained age 50 to make addi‑ tional elective deferrals that are catch-up contributions. The regulations reflect stat‑ utory changes made by the SECURE 2.0 Act of 2022, including the requirement that catch‑up contributions made by cer‑ tain catch-up eligible participants must be designated Roth contributions. The regu‑ lations affect participants in, beneficiaries of, employers maintaining, and adminis‑ trators of certain retirement plans.

DATES: Effective date : These regulations are effective on November 17, 2025.

Applicability date : These regulations generally apply with respect to contributions in taxable years beginning after December 31, 2026. However, see §§1.401(k)‑1(f)(5) (iii), 1.414(v)‑1(i)(2), and 1.414(v)‑2(e)(2) and the Applicability Dates section later in this preamble for additional details regard‑ ing applicability dates.

FOR FURTHER INFORMATION CONTACT: Jessica S. Weinberger at (202) 317‑6349 (not a toll‑free number) or Christina M. Cerasale at (202) 317‑4102 (not a toll‑free number).

SUPPLEMENTARY INFORMATION:

Authority

This document sets forth amendments to the Income Tax Regulations (26 CFR part 1) under sections 401(k), 403(b), and 414(v) of the Internal Revenue Code (Code) relating to catch‑up contribu‑ tions. These final regulations are issued by the Secretary of the Treasury or the Secretary’s delegate (Secretary) under the express delegations of authority in sections 401(m)(9), 414(v)(7)(D), and 7805(a) of the Code. Section 401(m)(9) provides, in part, that “[t]he Secretary shall prescribe such regulations as may be necessary to carry out the purposes of [section 401(m) and (k)].” Section 414(v)(7)(D) provides a spe‑ cific delegation of authority with respect to the requirements of section 414(v)(7) (A), stating, “[t]he Secretary may provide by regulations that an eligible participant may elect to change the participant’s elec‑ tion to make additional elective defer‑ rals if the participant’s compensation is determined to exceed the limitation under

[section 414(v)(7)(A)] after the election is made.” Section 7805(a) provides that “the Secretary shall prescribe all needful rules and regulations for the enforcement of [the Code], including all rules and reg‑ ulations as may be necessary by reason of any alteration of law in relation to internal revenue.”

Background

This document sets forth amendments to the Income Tax Regulations under sec‑ tion 414(v) of the Code. Section 414(v) permits a retirement plan to allow catch‑up eligible participants to make additional elective deferrals that are catch‑up con‑ tributions and sets forth requirements relating to those contributions. ¹ These final regulations amend the regulations under section 414(v) to reflect changes to the catch‑up contribution requirements

for certain catch‑up eligible participants pursuant to sections 109, 117, and 603 of Division T of the Consolidated Appropria‑ tions Act, 2023, Public Law 117‑328, 136 Stat. 4459 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). This document also sets forth conform‑ ing amendments to the regulations under sections 401(k) and 403(b) of the Code that reflect section 603 of the SECURE 2.0 Act.

I. General Statutory and Regulatory Framework

Section 414(v)(1) of the Code pro‑ vides that an applicable employer plan will not be treated as failing to meet any requirement of the Code solely because it permits an eligible participant to make additional elective deferrals (as defined in section 414(v)(6)(B)) in any plan year. “Applicable employer plan” is defined in section 414(v)(6)(A) to mean a quali‑ fied plan under section 401(a) (qualified plan), a plan under which amounts are contributed by an individual’s employer for an annuity contract described in sec‑ tion 403(b) (section 403(b) plan), an eli‑ gible deferred compensation plan under section 457 of an eligible employer described in section 457(e)(1)(A) (eligible governmental 457(b) plan), ² an arrange‑ ment meeting the requirements of sec‑ tion 408(k) (SEP arrangement), and an arrangement meeting the requirements of section 408(p) (SIMPLE IRA plan). Under section 414(v)(5), an eligible par‑ ticipant is a participant who is generally eligible to make elective deferrals under an applicable employer plan, who would attain age 50 by the end of the taxable year, and with respect to whom no further elective deferrals may (without regard to section 414(v)) be made to the plan for the plan year (or other applicable year) by reason of a limitation or restriction listed in section 414(v)(3) or a comparable lim‑ itation or restriction included in the terms of the plan.

1 Existing §1.414(v)-1(g)(3) provides that an employee is a “catch-up eligible participant” for a taxable year if the employee is eligible to make elective deferrals under an applicable employer plan (without regard to section 414(v) or §1.414(v)-1) and the employee’s fiftieth or higher birthday would occur before the end of the employee’s taxable year.

2 Section 414(v)(6)(C) provides that section 414(v) does not apply to a participant in an eligible governmental 457(b) plan for any year for which a higher limitation applies to the participant under section 457(b)(3).

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Under section 414(v)(2)(A), the amount of additional elective deferrals that a plan may permit a participant to make pursuant to section 414(v)(1) for a taxable year is limited to the lesser of: (1) the applicable dollar amount under sec‑ tion 414(v)(2)(B) (referred to as the appli‑ cable dollar catch‑up limit), and (2) the excess (if any) of the participant’s com‑ pensation (as defined in section 415(c) (3)) for the year over any other elective deferrals of the participant for such year that are made without regard to sec‑ tion 414(v). Section 414(v)(2)(B)(i) pro‑ vides the applicable dollar catch‑up limit for an applicable employer plan other than a plan described in section 401(k)(11) (SIMPLE 401(k) plan) or a SIMPLE IRA plan. Section 414(v)(2)(B)(ii) provides the applicable dollar catch‑up limit for a SIMPLE 401(k) plan or a SIMPLE IRA plan (collectively referred to as SIMPLE plans). Section 414(v)(2)(C) provides that the applicable dollar catch‑up limits under section 414(v)(2)(B)(i) and (ii) are subject to annual adjustment based on changes in the cost of living. Section 414(v)(2) (D) provides that, for purposes of sec‑ tion 414(v)(2), all applicable employer plans, other than eligible governmental 457(b) plans, that are maintained by the same employer (as determined under sec‑ tion 414(b), (c), (m), or (o)) are treated as a single plan, and all eligible governmen‑ tal 457(b) plans that are maintained by the same employer are treated as a single plan.

Under section 414(v)(3)(A)(i), a catch‑up contribution is not, with respect to the year in which the contribution is made, subject to certain otherwise appli‑ cable limitations, including those con‑ tained in section 401(a)(30) (limiting a participant’s elective deferrals during a calendar year to the amount permitted under section 402(g)), section 403(b) (including the requirement under sec‑ tion 403(b)(1)(E) that a contract pur‑

chased under a salary reduction agree‑ ment must meet the requirements of section 401(a)(30)), and section 457(b) (2) applied without regard to any increase under section 457(b)(3) (limit‑ ing a participant’s elective deferrals for a taxable year to the applicable dollar amount in section 457(e)(15), or if less, 100 percent of the participant’s includi‑ ble compensation). Under section 414(v) (3)(B), in the case of any catch‑up con‑ tribution to a plan, except as provided in section 414(v)(4), the plan shall not be treated as failing to meet the require‑ ments of sections 401(a)(4), 401(k)(3), 401(k)(11), 403(b)(12), 408(k), 410(b), or 416 by reason of the making of (or the right to make) the catch‑up contribution.

Section 414(v)(4) provides that an applicable employer plan is treated as failing to meet the nondiscrimination requirements under section 401(a)(4) with respect to benefits, rights, and features unless the plan allows all catch‑up eligi‑ ble participants to make the same election with respect to catch‑up contributions. For purposes of section 414(v)(4), all plans maintained by employers that are treated as a single employer under section 414(b), (c), (m), or (o) are treated as one plan (with the exception of a plan described in section 410(b)(6)(C)(i) for the duration of the transition period described in sec‑ tion 410(b)(6)(C)(ii) with respect to that plan).

Section 414(v) was added to the Code by section 631 of the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107‑16, 115 Stat. 38. The Department of the Treasury (Treasury Department) and the IRS issued compre‑ hensive regulations under section 414(v) in 2003 (TD 9072, 68 FR 40510). Sub‑ sequently, provisions relating to catch‑up contributions under section 414(v) were incorporated into regulations under sec‑ tions 401(k), 403(b), and 457(b).

II. SECURE 2.0 Act Changes to Section 414(v)

A. Section 109 of the SECURE 2.0 Act

For taxable years beginning after December 31, 2024, section 109 of the SECURE 2.0 Act amends section 414(v) (2) of the Code to increase the applicable dollar catch‑up limit under section 414(v) (2)(B)(i) and (ii) in the case of a catch‑up eligible participant who attains age 60, 61, 62, or 63 during the taxable year. For such a participant in an applicable employer plan other than a SIMPLE plan, the increased applicable dollar catch‑up limit is 150 percent of the otherwise applicable dollar catch‑up limit under section 414(v) (2)(B)(i) in effect for 2024. ³ For such a participant in a SIMPLE plan, the increased applicable dollar catch‑up limit is 150 percent of the otherwise applicable dollar catch‑up limit under section 414(v) (2)(B)(ii) in effect for 2025. ⁴ In either case, for a year beginning after December 31, 2025, the increased applicable dollar catch‑up limit is subject to adjustment to reflect changes in the cost of living, in accordance with the last sentence of sec‑ tion 414(v)(2)(C).

B. Section 117 of the SECURE 2.0 Act

A SIMPLE plan is an alternative plan design under which employees of an eligi‑ ble employer as defined in section 408(p) (2)(C)(i) (that is, generally, an employer that had no more than 100 employees who received at least $5,000 of compensation from the employer for the preceding cal‑ endar year) are permitted to elect to have salary reduction contributions (or elec‑ tive contributions, in the case of a SIM‑ PLE 401(k) plan) made on their behalf. ⁵ Among other things, section 117 of the SECURE 2.0 Act amends section 414(v) (2) of the Code to increase the applicable

3 Under section 414(v)(2)(E)(i), the adjusted annual limit on catch-up contributions that applies to an employee participating in an applicable employer plan other than a SIMPLE plan in a year in which the employee attains age 60, 61, 62, or 63 is described as the greater of $10,000 or an amount equal to 150 percent of the otherwise applicable dollar catch-up limit under sec‑ tion 414(v)(2)(B)(i) in effect for 2024. However, the amount equal to 150 percent of the otherwise applicable dollar catch-up limit for 2025 ($11,250) is greater than $10,000, and this amount will continue to be greater than $10,000 in future years.

4 Under section 414(v)(2)(E)(ii), the adjusted annual limit on catch-up contributions that applies to an employee participating in an applicable employer plan that is a SIMPLE plan in a year in which the employee attains age 60, 61, 62, or 63 is described as the greater of $5,000 or an amount equal to 150 percent of the otherwise applicable dollar catch-up limit under section 414(v) (2)(B)(ii) in effect for 2025. However, the amount equal to 150 percent of the otherwise applicable dollar catch-up limit for 2025 ($5,250) is greater than $5,000, and this amount will continue to be greater than $5,000 in future years.

5 The annual limit on salary reduction contributions or elective contributions is lower for SIMPLE plans than for other types of plans. In addition, SIMPLE plans are not subject to nondis‑ crimination testing, and the employer must make certain contributions.

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dollar catch-up limit under section 414(v) (2)(B)(ii) for SIMPLE plans sponsored by certain eligible employers who are described in section 408(p)(2)(E)(iv). ⁶ The increased applicable dollar catch-up limit is available automatically to a SIMPLE plan sponsored by an eligible employer described in section 408(p)(2)(E)(iv) that had no more than 25 employees who received at least $5,000 of compensa‑ tion from the employer for the preceding calendar year. Other eligible employers described in section 408(p)(2)(E)(iv) may make an election for the increased appli‑ cable dollar catch-up limit to apply and, if the election is made, the employer must make additional matching or nonelective contributions.

The increased applicable dollar catch-up limit, which applies to taxable years beginning after December 31, 2023, is 110 percent of the otherwise applicable dollar catch-up limit under section 414(v) (2)(B)(ii) for calendar year 2024. For a year beginning after December 31, 2024, the increased applicable dollar catch-up limit is subject to adjustment to reflect changes in the cost of living, in accor‑ dance with section 414(v)(2)(C)(ii).

C. Section 603 of the SECURE 2.0 Act

Section 603(a) of the SECURE 2.0 Act amends section 414(v) of the Code to add section 414(v)(7). Section 414(v)(7)(A) sets forth the requirement that catch-up contributions made by certain catch-up eli‑ gible participants must be designated Roth contributions (the Roth catch-up require‑ ment). Specifically, under section 414(v) (7)(A), in the case of a catch-up eligible participant whose wages as defined in section 3121(a) (that is, wages for pur‑ poses of the Federal Insurance Contribu‑ tions Act (FICA), codified at subtitle C, chapter 21 of the Code, or FICA wages) for the preceding calendar year from the employer sponsoring the plan exceeded $145,000, section 414(v)(1) applies only if any catch-up contributions made by the

participant are designated Roth contribu‑ tions (as defined in section 402A(c)(1)).

Section 414(v)(7)(B) provides that, in the case of an applicable employer plan with respect to which section 414(v)(7) (A) applies to any participant for a plan year, section 414(v)(1) does not apply to the plan unless the plan provides that any catch-up eligible participant may make catch-up contributions as designated Roth contributions. Section 414(v)(7)(C) pro‑ vides that section 414(v)(7)(A) does not apply to SEP arrangements or SIMPLE IRA plans. Under section 414(v)(7)(D), the Secretary may issue regulations pro‑ viding that a catch-up eligible participant may elect to change the participant’s elec‑ tion to make catch-up contributions if the participant’s compensation is determined to exceed the wage limitation under sec‑ tion 414(v)(7)(A) after the election is made. Under section 414(v)(7)(E), for taxable years beginning after December 31, 2024, the wage limitation is adjusted for changes in the cost of living (the wage limitation, as adjusted, is referred to as the Roth catch-up wage threshold). ⁷

Section 603(b) of the SECURE 2.0 Act includes conforming amendments with respect to section 603(a). Section 603(b) (1) of the SECURE 2.0 Act strikes sec‑ tion 402(g)(1)(C) of the Code. Prior to its elimination, section 402(g)(1)(C) pro‑ vided that a catch-up eligible participant’s gross income did not include elective deferrals in excess of the applicable dollar amount under section 402(g)(1)(B) to the extent that the amount of those elective deferrals did not exceed the applicable dollar catch-up limit under section 414(v) (2)(B)(i) for the taxable year (without regard to the treatment of the elective deferrals by an applicable employer plan under section 414(v)).

Section 603(b)(2) of the SECURE 2.0 Act amends section 457(e)(18)(A) (ii) of the Code and, pursuant to this amendment, if a catch‑up eligible partic‑ ipant’s limit under section 457(e)(18) is greater than the limit under section 457(b)

(3) (determined without regard to sec‑ tion 457(e)(18)), then a portion of the catch‑up contributions made to the eligi‑ ble governmental 457(b) plan by the par‑ ticipant is required to be designated Roth contributions. The portion of the catch‑up contributions that is subject to this Roth requirement is the amount by which the sum of the limits under sections 457(b)(2) and 414(v)(2)(B)(i) exceeds the maximum permitted contribution set forth in sec‑ tion 457(b)(3) (determined without regard to section 457(e)(18)).

Under section 603(c) of the SECURE 2.0 Act, the amendments made by sec‑ tion 603 of the SECURE 2.0 Act apply to taxable years beginning after Decem‑ ber 31, 2023.

III. Notice 2023-62

In August 2023, the Treasury Depart‑ ment and the IRS issued Notice 2023-62, 2023-37 IRB 817. Notice 2023-62 clar‑ ifies that, despite the elimination of sec‑ tion 402(g)(1)(C) of the Code under sec‑ tion 603(b)(1) of the SECURE 2.0 Act, applicable employer plans may, for tax‑ able years beginning after December 31, 2023, continue to permit catch-up eligi‑ ble participants to make elective deferrals that exceed the applicable dollar amount under section 402(g)(1)(B) of the Code (or deferrals that exceed the applicable dollar amount under section 457(e)(15)) if those contributions in excess of the applicable dollar amount satisfy the requirements for catch-up contributions under sec‑ tion 414(v). In addition, pursuant to Notice 2023-62, the first two taxable years begin‑ ning after December 31, 2023, are regarded as an administrative transition period with respect to the Roth catch-up requirement. During the administrative transition period, catch-up contributions made by a partic‑ ipant who is subject to the Roth catch-up requirement will be treated as satisfying the requirements of section 414(v)(7)(A), even if the contributions are not designated Roth contributions.

6 An eligible employer is described in section 408(p)(2)(E)(iv) if, during the three-taxable-year period preceding the first year that the employer maintained the SIMPLE plan, the employer (including any member of the employer’s controlled group or any predecessor of the employer or member of its controlled group) has not established or maintained a qualified plan, a sec‑ tion 403(a) annuity plan, or a section 403(b) plan under which contributions were made or benefits were accrued for substantially the same employees as the employees eligible to participate in the SIMPLE plan. See Q&A E-1 in Notice 2024-2, 2024-2 IRB 316.

7 The adjustments are to be made in the same manner as adjustments under section 415(d)(1)(A) (including that any increase which is not a multiple of $5,000 is rounded to the next lower multiple of $5,000), except that the base period is the calendar quarter beginning July 1, 2023.

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