A SECURE 2.0 provision that quietly started January 1 requires some high earners' catch-up contributions to go in after-tax instead of pre-tax. Here's the real threshold, who it actually hits, and what to check.
If you've been running a Solo 401(k) for a few years and you're 50 or older, there's a rule change that took effect this January that's worth a real look — not because it changes how much you can contribute, but because it can change how that money gets taxed. Under a SECURE 2.0 provision, once you're old enough to make catch-up contributions, those catch-up dollars may now have to go in as Roth (after-tax) rather than pre-tax, if your prior-year wages crossed a certain line. The rule was delayed twice while payroll and plan systems caught up, and the IRS confirmed in final regulations that it's now live for 2026. If nobody's mentioned this to you yet, that's not unusual — it's a technical change, and it mostly flew under the radar this spring.
Starting in 2026, if you're 50 or older and your prior-year wages from the employer sponsoring your retirement plan topped $150,000 (that's the 2026 threshold, based on 2025 wages — it started at $145,000 and gets adjusted for inflation each year), any catch-up contribution you make has to be Roth. Not optional, not your choice at contribution time — if the wage test is met and your plan doesn't offer a Roth option, you simply can't make catch-up contributions at all until it does.
The regular contribution limits didn't shrink because of this. For 2026, the standard catch-up is still $8,000 for anyone 50 or older, and it climbs to $11,250 if you're between 60 and 63, on top of the $24,500 base employee deferral limit. What changed is the tax treatment of that catch-up piece for people who cross the wage threshold — not the dollar amount you're allowed to put in.
Here's the nuance that matters most if you've been self-employed for years: the rule is written around "wages" from the employer sponsoring the plan. If you're a sole proprietor or a partner and your Solo 401(k) is funded from self-employment income rather than a W-2, you typically don't have "wages" in the sense this rule is testing for — so many plan providers treat sole proprietors as outside the mandatory Roth requirement for now. It's a different story if you've elected S-corp or C-corp treatment and pay yourself a W-2 salary from that entity. In that case, if your W-2 wages crossed $150,000 last year, the Roth catch-up requirement applies to you the same as it would to any corporate employee.
Pull last year's W-2 (if you have one from your own S-corp or C-corp) and check it against the $150,000 threshold, then confirm with your Solo 401(k) provider whether your plan document actually offers a Roth catch-up option. Some older or bare-bones plan documents were never set up with a Roth feature at all — and if that's true of yours and the rule applies to you, you won't be able to make any catch-up contribution this year until the plan is amended.
Whether you're subject to this rule depends on your entity structure, how your Solo 401(k) is funded, and what your actual wages were last year — this genuinely varies person to person, and there's some real debate even among retirement plan attorneys about exactly how the wage test applies to owner-only businesses. This is general, educational information, not individualized advice for your account. If you're not sure where you land, it's worth a real conversation before you make your next catch-up contribution rather than guessing and having to unwind it later.
Retirement plan rules like this one are exactly the kind of thing that's easy to miss when you're heads-down running your business. If you want a calm, guided way to look at your whole tax picture instead of chasing down changes like this one at a time, The Calm & Confident Tax Prep Kit walks you through it step by step. Or start with the free Mid-Year Tax Reset and see exactly where you stand before your next contribution.
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