On August 25, 2023, the Internal Revenue Service issued Notice 2023-62 providing guidance for a two-year administrative transition period that serves to delay until January 1, 2026, the implementation date of the provision in the SECURE 2.0 Act that requires age-50 catch-up contributions for individuals who earned over $145,000 in the prior year be made on a Roth basis. The provision was initially set to take effect on January 1, 2024.
The news is welcomed relief for plan sponsors and others involved in the administration of retirement plans, including payroll providers and recordkeepers. The delay will provide additional time for the Department of Treasury and IRS to draft the necessary guidance and for vendors to then operationalize the requirements. The recordkeeper of your plan has likely been working on procedures to help you satisfy the original effective date of January 1, 2024, so expect them to provide additional guidance and information specific to you and your plan in the upcoming weeks.
The information herein is general in nature and may not be considered legal or tax advice. You should consult an attorney or tax professional regarding your specific situation.