What changed
The Treasury Department and IRS issued final regulations on September 15, 2025, that lock in the Secure 2.0 requirement for certain higher earners’ 401(k) catch-up contributions to be made as Roth (after-tax). The final rules generally apply for taxable years beginning after December 31, 2026 (that is, starting in 2027), though plans may adopt the change sooner using a reasonable, good‑faith approach. The final regulations also clarify administrative details, including how to aggregate wages across certain separate common-law employers, how “deemed Roth” elections can work, and correction methods for compliance failures.
Practically, this means workers age 50+ who earned more than $145,000 in Social Security wages from their current employer in the prior year will have to make catch-up contributions on a Roth basis once the rule applies. Financial-press summaries of the rule highlight that while the effective date is 2027, some plans may opt to implement in 2026.
Remember the earlier transition relief: IRS Notice 2023-62 previously delayed enforcement of the original 2024 start and confirmed catch-ups remained available after 2023. That administrative transition generally ends December 31, 2025; the new final regulations do not extend it.
Why it matters to fleets that sponsor retirement plans
For carriers sponsoring 401(k) or 403(b) plans, two immediate to-dos stand out: ensure your plan offers a Roth contribution feature by the time the rule applies, and make sure payroll/HRIS can identify employees over the wage threshold using prior-year W‑2 Social Security wages. The final regs also let administrators aggregate wages across certain separate common-law employers—important for multi-entity fleets—and they describe a “deemed Roth election” approach if a high earner elects pre-tax catch-up after the rule kicks in. Work with your recordkeeper and ERISA counsel to decide whether to early-adopt in 2026 or wait until 2027.
- Confirm your plan has a Roth feature and that all age‑50+ participants can make Roth catch-ups if any “impacted” participant must.
- Coordinate payroll to flag prior‑year wages over $145,000 and align with recordkeeping systems for catch-up elections.
- Update participant communications for 2026 open enrollment, noting the shift to Roth catch-ups for affected employees in 2027 (or earlier if you adopt sooner).
Also note Secure 2.0’s “super catch-up” window for ages 60–63, which increases the catch-up limit in those years; make sure your payroll and plan documents reflect that option if you offer it.
Tip deduction: what counts, who qualifies, and why transportation is on the list
Separately, the IRS released guidance implementing the new “no tax on tips” deduction enacted in July 2025. For tax years 2025–2028, eligible workers in occupations that “customarily and regularly” receive tips may deduct up to $25,000 of qualified, reported tips from federal income tax (with phase‑outs beginning at $150,000 of modified AGI for single filers and $300,000 for joint filers). The agency published proposed rules defining “qualified tips” and listing nearly 70 occupations grouped into categories that include Transportation and Delivery.
Key definitions: tips must be voluntary amounts from customers (including via a tip pool); some service charges do not qualify if the customer has no option to adjust or decline them. Tips must be properly reported (e.g., on Forms W‑2/1099 or Form 4137). Digital assets and amounts tied to illegal or adult activities are excluded. Independent reporting has underscored these guardrails and the income caps.
Implications for trucking employers and owner-operators
- Most long‑haul truck drivers are not typically in tipped roles, but last‑mile delivery, courier, valet, shuttle, and certain passenger‑transport roles may be. If your fleet operates in those segments—or owns hospitality/foodservice subsidiaries—review the proposed list and prepare payroll and information reporting for 2025 returns.
- Owner‑operators in delivery niches who receive voluntary tips should institute clear tip‑tracking and reporting now to substantiate any 2025 deduction and to avoid payroll tax issues. Consult a tax professional on how the AGI phase‑out, filing‑status restrictions, and documentation apply.
- Monitor timing: the IRS has opened a public comment window on the tipped‑occupations list and definitions; final rules could refine eligibility details before filing season.
The bottom line for fleets
On retirement plans, the Roth catch-up mandate effectively arrives in 2027, with optional early adoption in 2026—so use 2026 to finish Roth enablement, payroll coordination, and participant education. On tips, transportation-adjacent roles may benefit from the new deduction through 2028, but only if tips are truly voluntary, properly reported, and the worker meets the occupation and income tests. Getting the compliance plumbing right now will help your shop avoid headaches at tax time.
Sources Consulted: IRS Newsroom and guidance; CNBC; Associated Press.
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This article was prepared exclusively for truckstopinsider.com. For professional tax advice, consult a qualified professional.
