Mandatory Roth Catch-Ups for High Earners

HIGH EARNERS: Effective January 1, 2026, employees whose FICA wages in the prior year exceeded $145,000, (hereinafter, High Earners), must make their catch-up contributions on a Roth basis (hereinafter, Roth catch-ups).
The Roth Catch-up $145,000 threshold will be subject to cost-of-living adjustments in the future, just like other limits.
Only wages earned from the employer sponsoring the plan are considered to determine the $145,000 threshold.
Employers do not need to be concerned with a participant’s wages at another job held by the participant during the determination year (the previous year) to establish High Earners.
Other members of the controlled or affiliated service group are not considered “the employer sponsoring the plan” even if they have adopted the same plan.
An individual who works for more than one member of a controlled group would have separate $145,000 thresholds for each employer.
Participants working for more than one employer that are sponsors of a MEP/PEP or Multiemployer Plan would not have their wages aggregated to determine High Earner status. Consistent with the controlled group situation, each employer has a separate $145,000 threshold. Collaboration is not needed across employers.
The $145,000 threshold is not prorated for partial year employment.
Since prior year FICA wages are used to identify the HIGH EARNER individuals, nobody can be a High Earner during their first year of employment.