Retirement catch-up contribution IRS rule change, effective Jan. 1, 2026

November 3, 2025

Employees age 50 or older, can make extra “catch-up” contributions to their retirement plans. Starting Jan. 1, 2026, catch-up contributions for employees earning more than $145,000 in wages (Box 3 on the 2025 W-2) must be made as Roth (after-tax) contributions under new IRS rules.

Employees earning more than $145,000 in 2025:

  • Age-based catch-up contributions in 2026 must be Roth (after-tax).
  • Taxes will be taken out prior to contributions going into the plan.
  • Contributions grow tax-deferred, and qualified withdrawals (once the account has been open for 5 years and other distribution rules are met) are tax-free, including earnings.

Employees earning $145,000 or less:

  • Catch-up contributions can be made via pre-tax or Roth, depending on preference.
Adjust or stop contributions any time in Workday. A job aid with instructions is available on the Workday Get Help page. Learn more.