The group behind the letter said there were many 'administrative hurdles' to implementing the new catch-up rule
Catch-up contributions for high-earning retirement savers are soon going to be taxed, but 50 organizations are urging the federal government to delay the new rule behind that.
As part of Secure 2.0 Act, retirement-focused legislation passed last year, workers 50 and older who earned $145,000 or more in the prior year will only be allowed to make Roth catch-up contributions beginning Dec. 31, 2023. Contributing on a Roth basis will subject them to taxation at the time those contributions are made. As it stands, catch-up contributions can be made before or after taxes, dependent on plan sponsor rules.
Organizations behind the letter, which was addressed to the Department of Treasury and the Internal Revenue Service, include the American Retirement Association, Fidelity Investments, IBM Corporation, the Insured Retirement Institute, the U.S. Chamber of Commerce, as well as state and local retirement systems.
The groups state the implementation of this rule comes with “administrative hurdles,” and asked that it be delayed until Jan. 1, 2026. Plan sponsors would have to allow for Roth contributions in their plans, and have a system in place to determine if the worker earned at least $145,000 the year before, a determination some employers cannot make by Jan. 1. There are also two ways to process catch-up contributions, and recordkeepers will need to update their systems.
“Plan sponsors, along with their payroll vendors and in-house payroll, and their service providers are working to implement this provision; however, because of the many outstanding issues that require Treasury guidance, it is proving difficult to implement this on a timely basis,” the letter said.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Vanishing act: DHS admits that 40% of catch-and-release migrants disappearedICE failed to deliver immigration court summonses to more than 80% of illegal immigrants caught and released under the Biden administration’s “parole” program just before the end of the Title 42 pandemic border policy, according to new statistics the government submitted to a federal judge.
Read more »
It may be Tim Scott’s moment — but he just can’t seem to catch fireThe Senator has seen a modest bounce since entering the GOP race last month.
Read more »
Don't Drive Your McLaren 600LT Too Hard Or It Might Catch Fire | CarscoopsMcLaren must recall every 2019-2020 600LT it sold in America after discovering that a design flaw could allow coolant to leak on the engine, potentially leading to a fire car auto cars
Read more »
Catch Pokemon while you dream with the new Pokemon Sleep appPokemon Sleep is a new sleep-tracking app that lets you catch Pokemon and fill up your Sleep Style Dex while you snooze.
Read more »
Oklahoma fish story: A boy makes a piranha-like catch from pondCharlie Clinton,, 11, pulled in a pacu from a pond near Oklahoma City. It's a fish normally found in South America that is closely related to the piranha.
Read more »