Us Secure 2 And Retirement Updates

---
name: us-secure-2-and-retirement-updates
description: "Tier 2 US federal content skill for SECURE Act 2.0 (Division T of CAA 2023) retirement plan changes plus IRS guidance through 2025. Covers the RMD age 73 (born 1951-1959) / 75 (born 1960+) transition, the $11,250 super catch-up for ages 60-63 effective 2025, the 2026 Roth-mandatory catch-up for $145k+ wage earners (delayed from 2024), the inherited-IRA annual RMDs during the 10-year rule effective 2025 per the July 2024 final regs, Saver's Match replacing Saver's Credit in 2027, Solo 401(k) ability to establish + fund by extended return due date, emergency-savings within plans, $1,000 emergency distribution, $10k domestic-abuse withdrawal, 529-to-Roth $35k lifetime rollover, the $108,000 QCD limit for 2025, Roth SEP and Roth SIMPLE, and the backdoor / mega-backdoor Roth mechanics with §408(d)(2) pro-rata."
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/us-secure-2-and-retirement-updates"
  jurisdiction: "US"
  tax_year: "2026"
  last_updated: "2026-10-16"
---

# US SECURE 2.0 and retirement rules (tax year 2026)

## Scope and who this is for

This skill covers the federal retirement rules that SECURE 2.0 (Division T of the Consolidated Appropriations Act, 2023, P.L. 117-328) and the later IRS guidance changed, as they apply in **tax year 2026**:

- contribution and catch-up limits for 401(k), 403(b), governmental 457(b), SIMPLE plans and IRAs, including the higher catch-up for ages 60 to 63;
- the rule that makes catch-up contributions Roth-only for higher-paid employees, which starts in 2026;
- required minimum distributions (RMDs): the starting age by year of birth, deadlines, and the excise tax for a shortfall;
- inherited accounts: the 10-year rule and the annual RMDs that apply inside it;
- qualified charitable distributions (QCDs);
- the 529-to-Roth IRA rollover;
- the Saver's Credit now and the Saver's Match from 2027;
- the new exceptions to the early-distribution additional tax;
- the first-year Solo 401(k) deferral rule and auto-enrollment for new plans.

It is written for someone preparing or reviewing a US federal return, or answering a planning question for an individual taxpayer. State tax treatment, state auto-IRA programs, defined-benefit plans, plan-document drafting and prohibited transactions are out of scope (see When to refuse or refer).

A short dated section near the end covers **2025 returns**, since extended 2025 returns are due 15 October 2026.

## Ask the client first

- **Year of birth**, and whether the person is still working for the employer that sponsors the plan. Are they a 5-percent owner of that employer?
- **Which accounts**: traditional or Roth IRA, SEP IRA, SIMPLE IRA, 401(k), 403(b), governmental 457(b), inherited IRA or plan account, 529 plan.
- For catch-ups: **age at 31 December 2026**, and their **2025 Social Security wages (Form W-2, box 3) from the employer that sponsors the plan**. Is the income W-2 wages, or self-employment income only?
- Does the plan **offer designated Roth contributions**, and does it offer the higher age 60–63 catch-up?
- For an inherited account: the **owner's date of death**, the owner's date of birth (to fix the owner's required beginning date), and the beneficiary's relationship, age, disability or chronic illness.
- For a QCD: **age on the date of the distribution**, whether the money goes directly from the IRA trustee to the charity, and any **deductible IRA contributions made for years when the owner was 70½ or over**.
- For a 529 rollover: when the 529 account was opened for this beneficiary, contributions in the last 5 years, the beneficiary's compensation for the year, and any other IRA contributions for the same year.
- Any RMD shortfall in an earlier year, and whether a Form 5329 has already been filed for it.

## The method, step by step

1. **Fix the year.** Use the 2026 figures below for 2026. For a 2025 return, use the dated 2025 section.
2. **Contributions.** Apply the elective deferral limit, then the catch-up for the person's age at year end. Then check the Roth-only catch-up rule, which depends on 2025 wages from that employer.
3. **Distributions during life.** Find the RMD starting age from the year of birth. Compute the RMD from the prior 31 December balance. Check the deadline. A QCD can satisfy the RMD.
4. **Inherited accounts.** Classify the beneficiary. Decide whether annual RMDs apply inside the 10-year period, and when the account must be emptied.
5. **Early distributions.** If the person is under 59½, check whether one of the exceptions below applies. Otherwise the [10% additional tax](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions) applies.
6. **Shortfalls.** For a missed RMD, compute the [25% excise tax, or 10% if corrected](https://www.law.cornell.edu/uscode/text/26/4974) within the correction window. Consider a reasonable-cause waiver.
7. **Report** on Form 1040, Form 5329 and Form 8606 as relevant, by the filing deadlines below.

## 2026 figures ([IRS Notice 2025-67](https://www.irs.gov/pub/irs-drop/n-25-67.pdf))

Source: IRS Notice 2025-67 and news release IR-2025-111 (13 November 2025).

| Item (2026) | Amount |
| --- | --- |
| Elective deferral limit, 401(k) / 403(b) / governmental 457(b) / TSP | $24,500 |
| Catch-up, age 50 or over | $8,000 |
| Catch-up, age 60, 61, 62 or 63 in 2026 | $11,250 |
| Defined contribution annual additions limit, §415(c) | $72,000 |
| Compensation limit, §401(a)(17) | $360,000 |
| Roth catch-up wage threshold (2025 wages, used for 2026) | $150,000 |
| SIMPLE plan deferral limit | $17,000 |
| SIMPLE deferral limit, certain SIMPLE plans with the higher SECURE 2.0 limit | $18,100 |
| SIMPLE catch-up, age 50 or over | $4,000 |
| SIMPLE catch-up in those higher-limit SIMPLE plans | $3,850 |
| SIMPLE catch-up, age 60 to 63 | $5,250 |
| IRA contribution limit (traditional and Roth combined) | $7,500 |
| IRA catch-up, age 50 or over | $1,100 |
| QCD annual limit per person | $111,000 |
| One-time QCD to a split-interest entity | $55,000 |
| Domestic abuse victim distribution cap (or 50% of the account, if lower) | $10,500 |
| Pension-linked emergency savings account (PLESA) balance cap | $2,600 |

Totals that follow from these: a participant aged 50 or over can defer up to **$32,500**. A participant aged 60 to 63 can defer up to **$35,750**. Catch-ups sit on top of the §415(c) limit, so the annual additions ceiling becomes **$80,000** with the age-50 catch-up, or **$83,250** with the age 60–63 catch-up.

**Roth IRA income phase-out (2026, modified AGI):**

- single or head of household: $153,000 to $168,000;
- married filing jointly: $242,000 to $252,000;
- married filing separately and lived with the spouse at any time in the year: phase-out from zero to $10,000.

**Saver's Credit AGI tiers (2026).** The credit rate is 50%, 20% or 10% of up to $2,000 of contributions, and zero above the top limit:

- married filing jointly: 50% up to $48,500, 20% up to $52,500, 10% up to $80,500;
- head of household: $36,375, $39,375 and $60,375;
- everyone else: $24,250, $26,250 and $40,250.

## The rules

### Catch-ups, including ages 60 to 63 ([IRC §414(v)](https://www.law.cornell.edu/uscode/text/26/414))

- The age-50 catch-up applies to a participant who reaches age 50 by the end of the year.
- The higher catch-up applies to a participant who **attains age 60, 61, 62 or 63 by the end of the taxable year**. In the year the participant reaches 64, the regular age-50 catch-up applies again. For 2026 this means people born 1963 through 1966.
- The higher limit is an **optional plan term**. Check whether the plan document includes it. If it does not, only the $8,000 catch-up is available.
- The IRA catch-up is separate. It is $1,100 in 2026, and there is no age 60–63 increase for IRAs.

### Roth-only catch-ups for higher-paid employees, from 2026 ([final regulations](https://www.federalregister.gov/documents/2025/09/16/2025-17865/catch-up-contributions))

**Rule (IRC §414(v)(7)).** A participant whose wages under §3121(a) **for the preceding calendar year from the employer sponsoring the plan exceed** the threshold may make catch-up contributions **only as designated Roth contributions**. For 2026 the test uses **2025** wages, and the threshold is **$150,000**. "Exceed" means more than: wages of exactly $150,000 are not caught.

- **Which wages.** Under the final regulations, the test uses Social Security wages (Form W-2, **box 3**), not Medicare wages (box 5), and only wages from the employer sponsoring the plan. The plan administrator may aggregate wages from certain related employers.
- **No FICA wages means no Roth requirement.** Someone with no FICA wages from the sponsoring employer in 2025 is not subject in 2026. The regulations give the example of a partner who had only self-employment income. This covers a sole proprietor funding a Solo 401(k) from Schedule C earnings. An S corporation owner-employee who receives W-2 wages is tested on those wages.
- **SEP and SIMPLE IRA plans are excluded** from the Roth catch-up requirement.
- **Plans without a Roth option.** Under the statute, if any participant is subject to the rule, the plan cannot allow catch-ups at all unless eligible participants can make them as Roth. The final regulations explain how a plan with no Roth program can operate. Ask the plan what it does before advising on catch-ups.
- **Effective dates.**
  - The IRS administrative transition period (Notice 2023-62) ended on 31 December 2025. From 2026 the statutory rule applies.
  - Final regulations (T.D. published 16 September 2025) generally apply to contributions in taxable years beginning after 31 December 2026. They apply later for certain governmental and collectively bargained plans.
  - For 2026, a plan must apply a **reasonable, good-faith interpretation** of the statute. Following the final regulations early satisfies this.
- **Deemed Roth election.** The final regulations allow a plan to treat an affected participant's catch-ups as Roth automatically, with rules for correcting failures. Ask the plan how it operates this.

The regular deferral limit ($24,500) can still be pre-tax. Only the catch-up portion must be Roth.

### RMD starting age and deadlines ([IRS: RMDs](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds))

| Date of birth | Applicable age |
| --- | --- |
| before 1 July 1949 | 70½ |
| 1 July 1949 to 31 December 1950 | 72 |
| 1951 to 1958 | 73 |
| 1959 | **unsettled** (see below) |
| 1960 or later | 75 |

- **Born in 1959.** The statute gives both 73 and 75 for people born in 1959. The July 2024 final regulations reserve this point and leave it to [proposed regulations (REG-103529-23)](https://www.federalregister.gov/documents/2024/07/19/2024-14543/required-minimum-distributions), under which the applicable age would be 73. They are not final. It does not bite until 2032, the year this group turns 73. Tell the client it is unsettled, and check for final guidance before then.
- **IRAs, SEP IRAs and SIMPLE IRAs.** The required beginning date is **1 April of the year after the year the owner reaches the applicable age**.
- **Workplace plans.** The first RMD is due by 1 April after the later of reaching the applicable age or retiring, if the plan allows the delay. The delay does not apply to a **5-percent owner**, who must start at the applicable age. It never applies to IRAs.
- **Later years.** Each later RMD is due by **31 December**. If the first RMD is delayed to 1 April, two RMDs fall in that calendar year.
- **2026 in practice.** People born in 1953 reach 73 in 2026. Their first RMD is for 2026, due by 1 April 2027. The 2027 RMD is due by 31 December 2027.
- **Amount.** Divide the balance at the prior 31 December by the Uniform Lifetime Table (Pub. 590-B, Table III) divisor for the owner's age that year. For example, the divisor is 26.5 at 73, 25.5 at 74 and 24.6 at 75. Use the Joint and Last Survivor Table instead if the sole beneficiary is a spouse more than 10 years younger.
- **Aggregation.**
  - IRAs: calculate the RMD for each IRA separately, then take the total from any one or more of them.
  - 403(b) contracts: the same rule applies among 403(b) contracts.
  - 401(k) and 457(b) plans: each plan must pay its own RMD.
- **Roth accounts.** Roth IRAs and designated Roth accounts in 401(k) and 403(b) plans need no withdrawals while the owner is alive. Beneficiaries are subject to the RMD rules.

### Missed RMDs: the excise tax ([IRC §4974](https://www.law.cornell.edu/uscode/text/26/4974))

- **Rate.** The tax is **25%** of the shortfall (IRC §4974(a)).
- **Reduced rate.** It drops to **10%** if, within the correction window, the taxpayer takes the missed amount from the same plan **and** files a return reflecting the tax.
- **Correction window.** It starts when the tax is imposed. It ends on the **earliest** of:
  - the mailing of a notice of deficiency;
  - assessment of the tax;
  - the last day of the second taxable year that begins after the year in which the tax was imposed.
- **Waiver.** The IRS can waive part or all of the tax if the shortfall was due to reasonable error and reasonable steps are being taken to remedy it. To ask for this:
  - take the missed distribution;
  - complete Form 5329, Part IX;
  - write "RC" and the amount to be waived in parentheses on the dotted line next to line 54a or 54b;
  - attach a statement of explanation.
  
  The IRS decides whether to grant the waiver.

### Inherited accounts: the 10-year rule ([RMD final regulations](https://www.federalregister.gov/documents/2024/07/19/2024-14542/required-minimum-distributions))

These rules apply where the owner died after 2019.

**Eligible designated beneficiaries (EDBs)** are identified at the owner's death. There are five kinds:

- the surviving spouse;
- the owner's child who has not reached the age of majority. The final regulations fix this at the **21st birthday**, after which the 10-year rule runs;
- a disabled individual;
- a chronically ill individual;
- any other individual not more than 10 years younger than the owner.

An EDB may use life-expectancy payments. Other individual beneficiaries, such as most adult children, grandchildren and friends, are designated beneficiaries who are not EDBs.

**The 10-year rule.** A non-EDB must empty the account by **31 December of the year containing the 10th anniversary of the owner's death**.

**Annual RMDs inside the 10 years**, under the final regulations of 19 July 2024, which apply from 2025:

- **Owner died before the required beginning date:** no distribution is required before the 10th year.
- **Owner died on or after the required beginning date:** annual RMDs **continue** in years 1 to 9, **and** the balance must be emptied by the end of year 10. The annual RMD uses the longer of:
  - the beneficiary's single life expectancy (Table I, fixed in the year after death and reduced by 1 each year); or
  - the owner's remaining life expectancy.

**Relief for 2021 to 2024 only.** Notices 2022-53, 2023-54 and 2024-35 waived the excise tax on these annual RMDs for 2021 to 2024. The relief covered beneficiaries of owners who died in 2020 to 2023 after their required beginning date.

- The relief did **not** extend the 10-year deadline.
- Waived years do not have to be made up.
- **2025 was the first year the annual RMD was enforced.** A 2025 shortfall is now a live 25% / 10% exposure (see Missed RMDs).

**Spouses.** A surviving spouse who is the sole beneficiary can elect to treat the inherited IRA as their own, in which case the Uniform Lifetime Table applies. Spousal elections interact with plan terms. Refer complex spousal cases to the plan or to Pub. 590-B.

### Qualified charitable distributions ([Pub. 590-B](https://www.irs.gov/publications/p590b))

- **Who.** The IRA owner must be **at least 70½ on the date of the distribution**.
- **How.** The IRA trustee pays the amount **directly** to a charity eligible to receive deductible contributions. A QCD cannot come from an ongoing SEP IRA or SIMPLE IRA. The taxpayer needs the same acknowledgment from the charity that a deduction would need.
- **Limit.** $111,000 per person for 2026. Each spouse on a joint return has their own limit. Any excess is taxable like any other distribution. The QCD is limited to the amount that would otherwise be taxable, and it comes first out of taxable amounts.
- **One-time split-interest election.** Up to $55,000 in 2026, through a charitable remainder annuity trust, charitable remainder unitrust or charitable gift annuity funded only by QCDs.
- **Offset for post-70½ deductions.** The excludable QCD is reduced by deductible IRA contributions for any year the owner was 70½ or over, to the extent those contributions have not already reduced an earlier QCD. Use the Pub. 590-B Appendix D worksheet.
- **RMD.** A QCD counts toward the year's RMD.
- **No double benefit.** There is no charitable deduction for a QCD excluded from income.

### 529 plan to Roth IRA rollover ([IRC §529(c)(3)(E)](https://www.law.cornell.edu/uscode/text/26/529))

This is available for distributions after 31 December 2023. All of the following conditions must be met:

- the 529 account has been maintained for the beneficiary for the **15-year period ending on the date of the distribution**. Pub. 590-A describes this as an account open for more than 15 years;
- the transfer is a **direct trustee-to-trustee transfer** to a Roth IRA **for the 529 beneficiary**;
- it excludes contributions made in the **5 years** before the distribution, and the earnings on them;
- in any year, the rollover is limited to the Roth IRA annual limit ($7,500 in 2026, plus the catch-up if 50 or over), **reduced by all other IRA contributions for that beneficiary for the year**. The Roth limit is tied to the §219 amount, so it cannot exceed the beneficiary's compensation for the year. Treat compensation at least equal to the rollover as a condition;
- the Roth income phase-out is **disregarded** for this rollover (IRC §408A(c)(3)(E));
- the lifetime cap is **$35,000** per beneficiary.

**Timing.** A distribution made after 31 December 2025 and before 15 April 2026, rolled over by 15 April 2026 and designated for 2025, counts as a 2025 Roth contribution.

**Open point.** The statute and IRS publications do not say whether a change of 529 beneficiary restarts the 15-year period. Treat a recently changed beneficiary as a point to confirm with the plan and the IRS before rolling over.

### Saver's Credit now, Saver's Match from 2027 ([IRC §6433](https://www.law.cornell.edu/uscode/text/26/6433), [IRC §25B](https://www.law.cornell.edu/uscode/text/26/25B))

- **2026.** The Saver's Credit (IRC §25B) still applies to IRA contributions, elective deferrals and voluntary employee contributions, with the 2026 income limits above. Contributions to the person's own ABLE account also count: P.L. 119-21 (July 2025) made them permanently eligible, for taxable years ending after 31 December 2025.
- **From 2027** (taxable years beginning after 31 December 2026):
  - **The Saver's Credit narrows.** It no longer counts retirement contributions, only the person's own ABLE account contributions. P.L. 119-21 raises the $2,000 contribution cap to $2,100.
  - **Retirement contributions move to the Saver's Match** (IRC §6433). The match is 50% of up to $2,000 of qualifying contributions, so at most **$1,000**.
  - **Where the match goes.** The IRS pays it into the person's retirement account, not as cash. The account must be one that accepts it and is **not a Roth IRA**, nor a designated Roth account.
  - **Small matches.** Someone whose match is above zero but under $100 can elect to take it as a credit instead.
- **Who is eligible for the match.** The person must:
  - be aged 18 or over at year end;
  - not be claimed as a dependent;
  - not be a student;
  - not be a nonresident alien, unless electing to be treated as a resident.
- **Contribution reduction.** Qualifying contributions are reduced by distributions in a testing period. The period covers the year, the 2 years before it, and the time after the year up to the return due date (including extensions). Plan loans, rollovers, conversions, and corrective or returned excess contributions are not counted (§6433(d)(2)(C)).
- **Phase-out.** Married filing jointly: it starts at modified AGI of $41,000 and runs over $30,000, so it is gone at **$71,000**. Head of household uses ¾ of those amounts. Other filers (not joint, not head of household, not surviving spouse) use ½. The percentage falls in proportion, rounded down to a whole point. The $41,000 figure is indexed only for years after 2027.

### Early distributions: SECURE-era exceptions to the additional tax ([IRS exceptions table](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions))

The 10% additional tax applies to distributions before age 59½ unless an exception applies. For a SIMPLE IRA in the first 2 years of participation, the rate is 25%. Income tax still applies in every case below.

| Exception | Limit and conditions | Repayable |
| --- | --- | --- |
| Emergency personal expense (§72(t)(2)(I)) | One per calendar year. The limit is the lesser of $1,000 or the vested balance over $1,000. Self-certified. No further emergency distribution from that plan for the next 3 calendar years unless repaid, or unless later contributions are at least the unrepaid amount | Yes, within 3 years |
| Domestic abuse victim (§72(t)(2)(K)) | Lesser of $10,500 (2026) or 50% of the vested account. It must be made **within 1 year** of a date on which the person is a victim of domestic abuse by a spouse or domestic partner. Self-certified | Yes, within 3 years |
| Birth or adoption (§72(t)(2)(H)) | Up to $5,000 per child. It must be made **within 1 year** of the birth or of the date the legal adoption of an eligible adoptee is finalised. The child's name, age and TIN must be on the return | Yes, within 3 years of receipt |
| Qualified disaster recovery (§72(t)(2)(M), §72(t)(11)) | Up to $22,000 per disaster. It must be made on or after the first day of the incident period and within 180 days after the applicable date. The person's principal place of abode during the incident period must be in the disaster area, and they must have an economic loss from the disaster. The income is spread over 3 years unless the person elects otherwise | Yes, within 3 years |
| Terminal illness (§72(t)(2)(L)) | Made on or after a physician certifies a terminal illness (life expectancy of 84 months or less). The employee must give sufficient evidence to the plan administrator | Yes, within 3 years |
| Qualified long-term care (§72(t)(2)(N), §401(a)(39)) | Live for distributions after 29 December 2025. Defined contribution plans only. Least of: premiums for certified long-term care insurance, 10% of the vested balance, or $2,600 (2026). Cover for a spouse needs a joint return. Not an eligible rollover distribution | No |
| Automatic-enrollment permissible withdrawal (§414(w)) | Elected no later than 90 days after the first automatic contribution | Not applicable |

### Solo 401(k): first-year deferrals and deadlines ([IRC §401(b)](https://www.law.cornell.edu/uscode/text/26/401))

- **Adopting a plan after year end.** An employer may adopt a plan after the year ends but before the return due date **including extensions**, and treat it as adopted on the last day of the year.
- **The election deadline (all other cases).** A sole proprietor's or partner's compensation is treated as available on the last day of the taxable year, so the owner **cannot make a deferral election for a year after that year ends** ([Treas. Reg. §1.401(k)-1(a)(6)(iii)](https://www.law.cornell.edu/cfr/text/26/1.401%28k%29-1)). For an existing plan, the 2026 deferral election must be made by 31 December 2026. Only the **deposit** of the deferral can wait until the return due date.
- **First-year exception.** This applies only to a plan adopted after year end under the retroactive-adoption election above. An owner of an unincorporated business who is its **only employee** may make **elective deferrals** for that plan's **first plan year** up to the return due date **without extensions** (normally 15 April). They are treated as made in that first year.
- **Employer contributions.** Profit-sharing contributions to a 401(k), and SEP contributions, are due by the due date of the employer's return **including extensions**.

### Automatic enrollment for new 401(k) and 403(b) plans ([IRC §414A](https://www.law.cornell.edu/uscode/text/26/414A))

- **Which plans.** For plan years beginning after 31 December 2024, a 401(k) or 403(b) plan established **on or after 29 December 2022** must auto-enroll.
- **Default rate.** The first-year rate must be between 3% and 10%. It rises by 1 percentage point a year until it is at least 10%, and never more than 15%.
- **Exceptions:**
  - plans established before 29 December 2022;
  - SIMPLE 401(k) plans;
  - governmental and church plans;
  - employers in existence for less than 3 years;
  - employers that have never normally employed more than 10 employees.

  The small-employer relief ends 1 year after the close of the first year in which the employer normally employs more than 10.

## Boundary and exception table ([Notice 2025-67](https://www.irs.gov/pub/irs-drop/n-25-67.pdf), [IRC §414(v)(7)](https://www.law.cornell.edu/uscode/text/26/414))

| Situation | Treatment |
| --- | --- |
| Age 59 at 31 Dec 2026 | Age-50 catch-up only ($8,000) |
| Turns 60 on 31 Dec 2026 | Higher catch-up ($11,250), because age is tested at year end |
| Turns 64 during 2026 | Back to $8,000 |
| 2025 box 3 wages from sponsor exactly $150,000 | Not above the threshold, so pre-tax catch-up is allowed |
| 2025 box 3 wages $150,001 or more from sponsor | Catch-up must be Roth |
| High wages from another, unrelated employer only | Not subject. The test is per sponsoring employer, unless the plan aggregates permitted related employers |
| Sole proprietor or partner, self-employment income only | Not subject to the Roth catch-up rule |
| SIMPLE IRA or SEP catch-up | Not subject to the Roth catch-up rule |
| Born 1959 | Applicable age unsettled. Recheck before 2032 |
| Still working at 73, 5-percent owner | No delay. RMDs start from the applicable age |
| Still working at 73, IRA | No delay for IRAs |
| Inherited from owner who died before RBD, non-EDB | Nothing due until year 10, then empty the account |
| Inherited from owner who died after RBD, non-EDB | Annual RMDs from the year after death (enforced from 2025), and empty by year 10 |
| QCD at age 70 and 5 months | Not a QCD. Taxable distribution |
| QCD paid to the owner, who then gives it to charity | Not a QCD |
| 529 account opened 14 years ago | Not eligible yet |
| 529 rollover when the beneficiary already contributed the full IRA limit | Nothing can be rolled that year |

## Worked cases ([Notice 2025-67](https://www.irs.gov/pub/irs-drop/n-25-67.pdf), [Pub. 590-B tables](https://www.irs.gov/publications/p590b))

**Case C1: ordinary catch-up.** Ana is 55 at the end of 2026. Her 2025 box 3 wages from the employer sponsoring her 401(k) were $120,000, which is under the threshold. She may defer $24,500 + $8,000 = $32,500, pre-tax or Roth as the plan allows.

**Case C2: age 62, Roth catch-up.** Ben turns 62 in 2026. His 2025 box 3 wages from his employer were $180,000. The plan offers the higher catch-up and a Roth option. He may defer $24,500 + $11,250 = $35,750.

- The $11,250 catch-up must be designated Roth, because his 2025 wages exceed $150,000.
- The $24,500 may be pre-tax.
- If the plan had no Roth option, he could make no catch-up contribution.

**Case C3: sole proprietor, excluded from the Roth rule.** Carla is 61 and has a Solo 401(k). Her only income is Schedule C self-employment income, with no FICA wages. The Roth catch-up rule does not apply to her 2026 catch-up. The $11,250 catch-up may be pre-tax if the plan document includes the higher limit. The §415(c) additions limit is still $72,000, before catch-ups.

**Case C4: first RMD.** Dev was born in March 1953, reaches 73 in 2026 and has a traditional IRA. His IRA balance at 31 December 2025 was $397,500. His 2026 RMD is $397,500 ÷ 26.5 = $15,000.

- It is due by 1 April 2027.
- If he waits until then, his 2027 RMD is also due by 31 December 2027, and both are taxed in 2027.

**Case C5: inherited IRA, owner died after RBD.** Eva's father died in 2022 at 80, after his required beginning date. Eva is his adult daughter, not disabled or chronically ill, and more than 10 years younger. She is a non-EDB. She was 50 in 2023, the year after death. Her Table I factor is 36.2 for 2023, falling by 1 each year, so it is 33.2 for 2026. Her father's remaining life expectancy is shorter, so hers applies.

- **2026 RMD.** The balance at 31 December 2025 was $332,000, so the RMD is $332,000 ÷ 33.2 = $10,000, due by 31 December 2026.
- **Deadline.** The account must be empty by 31 December 2032.
- **Earlier years.** The 2023 and 2024 RMDs fell under Notice 2023-54 (2023) and Notice 2024-35 (2024) relief. The 2025 RMD was due, and if it was missed it must be corrected now.
- **Excise tax if the 2026 RMD is missed.** The tax is 25% of $10,000 = $2,500. It falls to 10% of $10,000 = $1,000 if she takes the amount and files within the correction window. She can also ask for a reasonable-cause waiver on Form 5329.

**Case C6: 529 rollover.** Farah's 529 account was opened for her in 2009. In 2026 she is 24, has wages of $40,000 and has already contributed $2,000 to a traditional IRA for 2026. The account has been maintained for more than 15 years. Contributions from the last 5 years, and their earnings, are excluded. Her maximum 2026 rollover is $7,500 − $2,000 = $5,500. It must be a direct transfer to a Roth IRA in her name, and it counts toward her $35,000 lifetime cap.

## 2025 returns, extended returns due 15 October 2026 ([Notice 2025-67](https://www.irs.gov/pub/irs-drop/n-25-67.pdf))

For 2025, use these figures instead:

| Item (2025) | Amount |
| --- | --- |
| Elective deferral limit | $23,500 |
| Catch-up, age 50 or over | $7,500 |
| Catch-up, age 60 to 63 in 2025 | $11,250 |
| §415(c) annual additions limit | $70,000 |
| SIMPLE deferral limit | $16,500 |
| SIMPLE catch-up, age 50 or over | $3,500 |
| IRA limit | $7,000 |
| IRA catch-up | $1,000 |
| QCD limit | $108,000 |
| One-time split-interest QCD | $54,000 |
| Domestic abuse distribution cap | $10,300 |

- **Roth income phase-out for 2025:** $150,000 to $165,000 for single or head of household; $236,000 to $246,000 married filing jointly.
- **Roth catch-up.** It was **not** required in 2025, because the Notice 2023-62 transition period ran to 31 December 2025. A pre-tax catch-up in 2025 is fine.
- **Missed 2025 RMDs are still correctable.** This includes the first annual inherited-IRA RMD under the final regulations, and the first RMD of people born in 1952, which was due by 1 April 2026. Take the distribution now and report it on Form 5329. The 10% rate needs both steps within the correction window.
- **IRA contributions for 2025** were due by 15 April 2026. Extensions do not apply to them.
- **Employer contributions for 2025.** SEP contributions and 401(k) profit-sharing contributions can still be made up to the extended due date of the 2025 return.
- **QCD reporting.** On the 2025 Form 1040 the QCD is reported on the IRA lines. Enter the taxable amount on line 4b and tick the QCD box on line 4c.

## When to refuse or refer

Refer rather than answer when the question involves:

- defined-benefit or cash-balance plan design, funding or §415(b) limits;
- plan-document amendments, EPCRS corrections of plan failures (including Roth catch-up operational failures), or Form 5500 questions;
- prohibited transactions, ESOPs, or multiemployer plans;
- trusts named as beneficiaries (see-through trust analysis), or several beneficiaries with different classifications;
- nonresident or cross-border pensions, or state tax on distributions;
- the born-1959 applicable age, or a 529 beneficiary change, if the answer turns on it (both unsettled).
- SECURE 2.0 items this skill does not cover in detail, which must be checked against the statute and IRS guidance before answering:
  - Roth SEP and Roth SIMPLE contributions (§601);
  - Roth employer matching and nonelective contributions (§604);
  - the surviving spouse's election to be treated as the deceased employee (§327);
  - long-term part-time employee eligibility (§125);
  - non-designated beneficiaries such as estates, charities and non-see-through trusts (5-year rule, or the owner's remaining life expectancy if the owner died on or after the required beginning date).

Never state that a 2026 catch-up can be pre-tax without the 2025 box 3 wages from the sponsoring employer. Never compute an inherited-account RMD without the owner's date of birth and date of death.

## Filing and payment steps, with deadlines ([Pub. 560](https://www.irs.gov/publications/p560), [Pub. 590-A](https://www.irs.gov/publications/p590a))

1. **2026 IRA and Roth IRA contributions.** Due by the due date of the 2026 return, **not including extensions**. For most people that is 15 April 2027.
2. **Elective deferrals.**
   - Employees defer through payroll during 2026.
   - For a self-employed person's plan, the deferral **election** must be made by the last day of the taxable year. Pub. 560's date (the due date of the employer's return, including extensions) is the last date to **deposit** the deferral, not to elect it.
   - The one exception is a sole owner's Solo 401(k) adopted after year end: first-year deferrals must be paid by the unextended due date.
3. **SEP and 401(k) employer contributions.** Due by the employer's return due date, including extensions.
4. **RMDs.** Take them by 31 December. The first RMD may wait until 1 April of the following year.
5. **Form 5329.** Report the RMD excise tax, any waiver request, and the early-distribution tax or an exception that Form 1099-R box 7 does not show.
6. **Form 8606.** Report nondeductible IRA contributions, conversions, and distributions with basis.
7. **Extensions.** An extension to 15 October gives more time to file, not to pay.

## Completion checklist ([Notice 2025-67](https://www.irs.gov/pub/irs-drop/n-25-67.pdf))

- [ ] Tax year confirmed. 2026 figures used for 2026, and the dated 2025 section for 2025.
- [ ] Age at year end checked for the catch-up band (50+, 60 to 63, back to age-50 at 64).
- [ ] The plan offers the age 60–63 catch-up and a Roth option (if relevant).
- [ ] 2025 box 3 wages from the sponsoring employer compared with the $150,000 threshold, using "more than".
- [ ] Self-employment-only, SEP and SIMPLE IRA cases excluded from the Roth catch-up rule.
- [ ] Applicable age from date of birth, with 1959 flagged as unsettled.
- [ ] Required beginning date, the still-working exception and the 5-percent owner rule applied.
- [ ] RMD computed from the prior 31 December balance and the correct table. Aggregation rules respected.
- [ ] Inherited account: EDB status, death before or after RBD, annual RMDs, and the year-10 deadline.
- [ ] Any shortfall: 25% or 10% excise tax, the correction window, and whether to ask for a waiver.
- [ ] QCD: 70½ on the distribution date, direct to charity, within the $111,000 limit, and not deducted again.
- [ ] 529 rollover: 15-year account, 5-year contribution exclusion, annual and $35,000 lifetime limits, direct transfer.
- [ ] Early distributions: exception identified and repayment window noted.
- [ ] Deadlines diarised: IRA contributions (no extension), employer contributions (with extension), RMDs.

## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-10-16. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `us-secure-2-and-retirement-updates` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/us-secure-2-and-retirement-updates. If neither is available, confirm every figure against the official source pages cited above before relying on it.