2026 401(k) Contribution Limits: Elective Deferrals, Catch-Ups & Annual Additions

No. The enhanced 60–63 catch-up is a separate, optional feature under SECURE 2.0. A plan can offer standard age 50+ catch-ups without offering the enhanced catch-up. If a sponsor wants to add the enhanced catch-up, the plan document must be amended to provide for it, and payroll must be configured to apply the higher limit ($11,250 for 2026) to eligible participants.

The 402(g) limit applies per taxpayer, not per plan. A participant who contributes to two unrelated 401(k) plans during the same calendar year — for example, after changing jobs mid-year — is responsible for ensuring their combined elective deferrals don't exceed the annual limit. Neither plan has visibility into the other, so this is the participant's obligation to monitor. If a participant exceeds the limit (an "excess deferral"), they must request a corrective distribution from one of the plans by April 15 of the following year to avoid double taxation.

No. The 402(g) limit applies only to employee elective deferrals — both pre-tax and Roth. Employer contributions (matching, profit sharing, safe harbor, and nonelective contributions) are separate and count toward the 415(c) annual additions limit instead. This is why a participant can receive total annual additions far above $24,500 in 2026: the combined limit of employee deferrals plus employer contributions plus forfeitures is capped at $72,000 under 415(c), not at the 402(g) figure.

No. The rule is triggered by FICA wages reported in W-2 Box 3. Partners receiving K-1 income and sole proprietors reporting on Schedule C have no FICA wages from the plan sponsor in the relevant sense, so the rule doesn't apply to them — even if their earned income is well above $150,000.

Only FICA wages paid by the plan sponsor during 2025 count. Wages from a prior employer are excluded. A high-earning new hire who joined mid-2025 may fall below the threshold for 2026 and become subject to the rule only in 2027 or later.

Yes. All catch-up contributions for high earners must be Roth, including the enhanced catch-up for participants aged 60–63.

Yes. The Roth requirement applies only to catch-up contributions. Regular deferrals up to the $24,500 402(g) limit can still be made on a pre-tax basis, Roth basis, or split between the two — based on the participant's election.

Adding a Roth feature is a discretionary amendment. Under IRS rules, discretionary amendments must be adopted by the last day of the plan year in which the change is effective. For a calendar-year plan that wants Roth contributions available starting January 1, 2026, the amendment must be adopted by December 31, 2026.

That said, the practical deadline is earlier than the legal one. To preserve catch-up eligibility for high earners, the Roth feature needs to be operationally available — coded in payroll and the recordkeeping system — before the first 2026 payroll in which an affected participant would otherwise make a catch-up contribution. Coordinate timing with your recordkeeper and document provider, since payroll setup typically needs lead time. Most sponsors who need to add Roth are working with their providers in the fall of 2025 to be operational on January 1, 2026, even though the formal amendment can be signed later in the year.

The pre-tax catch-ups must be treated as Roth. The mechanics depend on when the error is caught:

• Caught before year-end: The recordkeeper transfers the affected contributions (plus attributable earnings) from the pre-tax source to the Roth source, and the amount is included in the participant's taxable wages on their Form W-2 for the year. Because the correction happens before W-2s are issued, no separate tax reporting form is needed — the Roth treatment flows through normal year-end payroll reporting.
• Caught after year-end: The IRS permits a streamlined correction using an in-plan Roth rollover combined with corrected Form 1099-R reporting. The plan transfers the affected pre-tax catch-up contributions (plus attributable earnings) to the participant's Roth source as an in-plan Roth rollover, and the recordkeeper issues a Form 1099-R reporting the rollover amount as taxable income to the participant. The participant includes that amount in taxable income, accomplishing the same tax result as if the contribution had been made as a Roth catch-up originally. This method is available even after W-2s have been issued, which avoids the need for corrected W-2s.

The after-year-end correction method requires that the plan permit in-plan Roth rollovers, so sponsors should confirm this feature is in the plan document — adding it, if needed, is itself a discretionary amendment subject to the end-of-plan-year deadline described in the previous FAQ.

The best correction is still prevention: configure payroll before January 1 to automatically route catch-ups to the Roth source for any participant flagged as a high earner based on prior-year FICA wages.

No — these are two different tests using two different thresholds. HCE status for 2026 is based on $160,000 in 2025 compensation (or 5% ownership). The Roth catch-up rule is based on $150,000 in 2025 FICA wages specifically from the plan sponsor. A participant can be an HCE but not subject to the Roth catch-up rule (for example, a >5% owner with modest W-2 wages), or subject to the Roth catch-up rule but not an HCE (uncommon, but possible if the FICA threshold rises more slowly than the HCE threshold in future years).