Roth Catch-Up in 2026: The $150,000 Test Uses Last Year's Box 3, Which Includes Your 401(k) Deferrals, So a Box 1 of $119,001 Can Be Over the Line

Starting with 2026, a 401(k) saver who is 50 or older has to make the catch-up as Roth contributions if the pay they got from that employer in the previous year was more than $150,000 (26 U.S.C. 414(v)(7); IRS Notice 2025-67). The pay that counts is the social security wages in box 3 of last year's W-2, and box 3 is not the number most people look at. Your own pre-tax 401(k) deferrals are wages for social security tax, so they are in box 3 but not in box 1 (26 U.S.C. 3121(v)(1); IRS W-2 instructions). The figures below come from the engine behind the 401(k) contribution limit calculator.

Box 1 is the wrong number to check

Pre-tax 401(k) deferrals are left out of box 1 (federal income tax wages) but are social security wages, so they are in box 3. When nothing else separates the two boxes, box 3 is box 1 plus your pre-tax deferrals for the year, which pulls the line down by the amount you saved. For the 2026 test, using the 2025 limits (IRS Notice 2025-67 prints them as the amounts it replaces):

Box 3 stops at the social security wage base (the W-2 instructions give $184,500 for 2026), a figure well above the line, so the cap does not hide anything at this threshold. Other pre-tax payroll items, such as health premiums through a cafeteria plan, generally come out of both boxes and leave the gap the same. Roth contributions are not in the gap: a designated Roth contribution is not excludable from gross income (26 U.S.C. 402A(a)(1)), so it is in box 1 as well as box 3. Look at box 3 of your own 2025 W-2 from the employer that sponsors the plan, not at a rule of thumb.

What the Roth catch-up costs this year

A Roth catch-up is not a loss: a qualified distribution from a designated Roth account is not income (26 U.S.C. 402A(d)(1)). What changes is when the tax is paid. A pre-tax catch-up would have lowered 2026 taxable income, so the cost of the rule is that deduction. The table shows how much federal income tax it would have saved in 2026 for someone who defers the regular $24,500 before tax, takes the standard deduction and has only wages (no state tax, no credits):

The saving is the catch-up times the bracket it would have come out of, and the bracket can change inside the amount: a single filer with $250,000 of wages has $209,400 of taxable income after the deferral and the standard deduction, so an $8,000 deduction removes $7,625 at 32% and $375 at 24%, $2,530 in all. The 2026 brackets are Revenue Procedure 2025-32's.

Who the rule does not reach

Only wages from the employer that sponsors the plan count, and only wages. The regulation's example 2 is a person who earned $60,000 of wages from an accounting firm and then became a partner with $155,000 of partnership income: total pay of $215,000, but not over the example's $155,000 threshold, because partnership income is not social security wages (26 CFR 1.414(v)-2(d)). Wages from a different employer are not added in: the test uses the wages from the employer sponsoring the plan, normally your common-law employer (1.414(v)-2(a)(2) and (b)(4)). Someone who did not work for the employer last year has no wages from it and is outside the rule for the year. The rule also does not touch anyone under 50, because there is no catch-up to be Roth.

A plan with no Roth program is a different case: for a person over the line the regulation makes the maximum catch-up $0, so they stop at $24,500 (1.414(v)-2(b)(2)). And because the test looks at the previous year, nothing you do with your 2026 pay changes it. The 2026 answer was set by your 2025 wages.

What to check

Read box 3 of your 2025 W-2 from the plan sponsor. If it is over $150,000, find out whether the plan has a Roth option and how it will apply the rule in 2026: the regulation itself applies from 2027, a good-faith reading is accepted for earlier years, and governmental and union plans have later dates (1.414(v)-2(e)). The regulation lets a plan simply treat every deferral above the regular limit as Roth, as long as you have a chance to choose otherwise (1.414(v)-2(c)(3)(i)(B)). The threshold moves each year with inflation, in steps of $5,000; the 2027 amount, which will be applied to 2026 wages, was not yet published on October 29, 2026.

What this does not cover

It is the arithmetic of the rule, not advice on whether to choose Roth or pre-tax, which depends on your tax rate now and later, your state and your other income. The saving table is federal income tax only, for one filer type per row, wages only, and the standard deduction. It does not model state tax, credits, the senior deduction, payroll tax (which is the same either way), or the way a lower taxable income can change other benefits. Confirm your own figures with the plan administrator or a tax professional.