Use this button to switch between dark and light mode.

Do You Want to Roth? SECURE 2.0 Offers Roth Opportunities to Retirement Plan Sponsors

January 17, 2023

Raising cash for the Fed, SECURE 2.0 offers two opportunities for plan contributions to be immediately taxed and characterized as designated Roth contributions to the plan. First, effective for tax years beginning after 2023, all employee catch-up contributions to 401(k) plans (and 403(b) and governmental 457(b) plans) for eligible employees whose wages for the preceding calendar year exceed $145,000 (indexed) must be made on a Roth basis. That leads to more taxable compensation for affected employees. Next, with the opportunity beginning now, SECURE 2.0 permits retirement plans to offer eligible employees the opportunity of characterizing fully-vested employer matching and nonelective contributions as designated Roth contributions—much like the existing in-plan Roth rollover opportunity. Pub. L. No. 116-94, Div. T, §§ 603, 604. More taxable compensation and more tax dollars.

Read now »


Related Content

  • Roth 401(k) Plan Design and Compliance
    See how designated Roth contributions in a plan that includes a Roth 401(k) program, are made on an after-tax basis, allowing qualified distributions from the Roth account, including its earnings, to be received tax-free. 
  • Defined Contribution Plan Contribution Rules
    Learn more about the tax benefits and rules relating to contributions made by employees and employers to qualified defined contribution plans under the Internal Revenue Code of 1986 and ERISA.

Practical Guidance Updates
Featuring the latest updates from your Practical Guidance account.   


Experience results today with practical guidance, legal research, and data-driven insights—all in one place.

Experience Lexis+