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IRS Extends Period for Roth IRA Catch-up Contributions

S.J. Steinhardt
Published Date:
Aug 28, 2023

iStock-488243762 Roth IRA Retirement resize

The IRS announced an extension for Roth catch-up contributions for certain people.

Under the new guidance, Notice 2023-62 , an administrative transition period under last December's SECURE 2.0 Act extends until 2026 a new provision requiring that catch-up contributions made by higher‑income participants in 401(k) and similar retirement plans have to be designated as after-tax Roth contributions. According to that provision, beginning in 2024, the new Roth catch-up contribution rule applies to an employee who participates in a 401(k), 403(b) or governmental 457(b) plan and whose prior-year Social Security wages exceeded $145,000.

The administrative transition period will help taxpayers transition smoothly to the new Roth catch-up requirement and is designed to facilitate an orderly transition for compliance with that requirement, the IRS stated.

The IRS also clarified that plan participants who are age 50 and over can continue to make catch‑up contributions after 2023, regardless of income.

The IRS also said that it and the Treasury Department plan to issue future guidance to help taxpayers.

To learn about the change to IRA distribution rules resulting from the SECURE Act 2.0, attend the Foundation for Accounting Education's New IRA Distribution Rules and Proactive Strategies for Clients Webinar on Sept. 19.

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