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Are mandatory Roth Solo 401k Catch-up contributions based on year 2026 wages?
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5 Replies
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Starting in 2026, the IRS will require Roth solo 401k catch-up contributions for certain age-50+ participants (as well as those ages 60, 61, 62, 63 and older) — but only if the participant earned more than $150,000 (indexed) in W-2 wages from the same employer in the prior year, so in 2025 for tax year 2026 for those making catch-up contributions.
Because a solo 401k is sponsored by your own business, the “current employer” is your own company. Therefore:
✅ 1. Mandatory Roth catch-ups are based on last year’s (year 2025) W-2 wages you paid yourself.
If your prior-year W-2 wages ≤ $150,000 (indexed), you may continue making pre-tax catch-up contributions.
If your prior-year W-2 wages > $150,000 (indexed), your age-50+ catch-ups MUST be Roth starting in 2026.2. The rule applies ONLY to W-2 wages from your S-corp., C-corp., or LLC taxed as an S-crop. or C-corp.) — not net self-employment income derived from your sole proprietorship, partnership or LLC taxed as sole proprietorship or partnership.
So it impacts S-Corp Solo 401k owners, not sole proprietors (since sole proprietors do not have W-2 wages).
3. “Look-back rule” = New employees get a free pass — and this also helps new S-Corp owners.
Because the IRS checks prior-year wages:
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If your S-Corp first issues you a W-2 in 2026, you had no W-2 wages in 2025 →
You are NOT subject to mandatory Roth catch-ups in 2026, regardless of income level. -
Even if hired (or you start paying yourself) late in the year, the $145K threshold is not prorated, so a high earner may still fall below the limit in year 2.
Bottom Line for Solo 401k Owners
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S-Corp owners with prior-year W-2 wages above $145K (indexed) → Roth catch-ups required in 2026+.
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S-Corp owners below the threshold → Can still choose pre-tax or Roth catch-ups.
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Sole proprietors → Not affected, because the rule applies only to W-2 compensation.
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New S-Corp owners get a one-year exemption due to having no prior-year wages.
mysolo401k.net
My Solo 401k Financial offers self-directed Solo 401k, IRA LLC & ROBS 401K Retirement Plans. Learn about Mandatory Roth Catch-Up Contributions (Including 401k & Solo 401k ) Effective January 1, 2026
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Hey Mark – I’m a bit confused about WHERE the catch-up contributions need to get contributed to in 2026 IF my wages are over $150K (NOTE: my 2025 wages were below $150K but this amount is determined in December based on our total annual retirement contributions (we do one annual payroll). SO, it’s possible my 2026 wages could be $150K). Do the catch-up contributions get transfered to our after-tax account and THEN to the MegaROTH? OR do they have to get transfered from the after-tax account to a new traditional ROTH that we’d have to set up? Please advise. Thank you!
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First you need to determine if your business is taxed as an S-corp. or as C-corp. If yes, then you need to determine if your social security wages W-2 wages (box 3) from your self-employed business were greater than $150,000 as of 12/31/2025. If yes, then your catch=up contributions for tax year 2026 will need to be made as mandatory Roth solo 401k contributions and cannot be applied as pre tax contributions.
Solo 401k Catch-up contributions cannot be applied as voluntary after-tax solo 401k contributions as the rules do not allow for it. Instead, you would contribute the catch-up contribution directly to the Roth solo 401k designated account.
mysolo401k.net
The Mega Back Door Roth Using a Solo 401k Plan - My Solo 401k Financial
Learn how our Roth Solo 401k plan can allow you to maximize Roth contributions using the Mega Back Door Roth.
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