Guidance for Identifying Taxpayers Subject to Roth Catch-Up Mandate

The IRS has indicated that it won't use the amount of Medicare wages reported in Box 5 of Form W-2 to determine who is subject to the mandate--but also that using that amount would be a good faith interpretation of the law during 2026. It's also important to remember that employers are not required to prorate an employee's wages during the first year of employment. Regardless of the compensation they receive, the mandate does not apply to taxpayers who did not receive FICA wages in excess of the $150,000 limit for 2026--even if, for example, a partner received self-employment income in excess of that amount. While employers who use a common paymaster are permitted to aggregate wages for determining whether an employee is subject to the mandate, they are not required to aggregate those wages. So, it's possible that an employee may not be subject to the mandate even if they earn a total of more than $150,000, but from multiple employers who do not elect to aggregate. For more information on the Roth catch-up contribution mandate beginning in 2026, visit Tax Facts Online.  Read More: Link to Q3761.