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Set up mandatory Roth catch-up and contributions for retirement plans

You can set up mandatory Roth catch-up contributions by creating and activating separate deduction items for traditional and Roth retirement plans. For high-earning employees, make sure catch-up contributions are made on a Roth basis, linking the appropriate deduction items for calculation.
Provision 603 of the SECURE Act 2.0 requires that high‑earning employees—those with more than $150,000 in prior‑year FICA wages, adjusted for inflation—who are age 50 or older make all catch‑up contributions to qualified retirement plans on a Roth (after‑tax) basis beginning January 1, 2026. This requirement applies to 401(k), 403(b), and 457(b) plans.
Do the following to set up mandatory Roth catch-up contributions for employees' retirement plans:

Client-level settings

You'll need to have 2 separate deduction items—1 set up as a traditional retirement plan and 1 set up as a Roth retirement plan.
  1. Go to the
    Payroll Items
     screen.
  2. Create or verify a deduction item exists with a
    Special Type
     of
    401(k) or 403(b)
    .
  3. Create or verify a 2nd deduction item exists with a
    Special Type
     of
    Roth 401(k) or Roth 403(b)
    .
note
The application currently doesn't support Roth 457(b) retirement plans.

Employee-level settings

Mandatory Roth catch-up contributions are configured in the
Employee Payroll Item Settings
 screen of traditional 401(k) and 403(b) deduction items.
  1. Go to the
    Employees
     screen then the
    Payroll Items
     tab.
  2. Mark the
    Active
     checkbox for both deduction items for the traditional retirement plan and Roth retirement plan.
  3. Select the ellipsis on the traditional retirement plan to open the
    Employee Payroll Item Settings
     window.
  4. Mark the
    Roth catch-up required (SECURE Act 2.0)
     checkbox.
    note
    This checkbox indicates the employee is a high-wage earner based on prior-year wages and is therefore subject to mandatory Roth catch-up requirements.
  5. In the
    Linked to:
     field, specify the Roth deduction item to use for calculating Rothified catch-up contributions during check entry.
    note
    The
    Calculation Type
     of the linked Roth item will change to
    Linked to:
     and the Rate will change to
    $0.00
    . This is expected behavior as this item is used to store the Rothified catch-up contributions from the parent item once they calculate.

This article applies to:

  • Product: Accounting CS
  • Subject: Payroll checks

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