The Internal Revenue Service (IRS) has agreed to put a two-year freeze on implementation of a contentious new rule that requires catch-up contributions by higher-income participants in 401(k) and similar retirement plans to be designated as after-tax Roth contributions.
Bowing to public pressure, the IRS has agreed to provide an administrative transition period until 2026 that postpones enforcement of a new provision in the SECURE 2.0 Act that requires catch-up contributions by higher-earning retirement plan participants to be designated not as pre-tax contributions to plans like the 401(k) but as after-tax contributions to Roth IRA accounts.
