Will SECURE 2.0 Glitch Get Fixed in Time

There was a technical error in SECURE 2.0 that may prevent any catch-up contributions beginning in 2024. Can the IRS fix it or will Congress need to act.

There was a technical error in SECURE 2.0 dealing with the changes to catch-up contributions for employer retirement plans. The change requires catch-up contributions be made on a ROTH basis (no immediate deduction for the contribution) if your annual wages are greater than $145,000 per year. If your wages are under that level, then a regular catch-up contribution could still be deducted from your wages.

This provision does not take effect until 2024, but the error indicates that no catch-up contributions are allowed beginning in 2024. It is pretty obvious that the IRS is well aware of the issue but MAY not have authority to fix it. Normally, it requires Congress to fix glitches like this, but as we saw way too many times during the pandemic, the IRS got used to making laws.

We shall see if Congress gets it fixed or not.