On December 29th, 2022, President Biden signed the Consolidated Appropriations Act, 2023 into law. This legislation contained the SECURE 2.0 Act of 2022 (the “Act”).  Below we provide insight into some of the Act’s key provisions and how they will impact individuals, as well as employers and retirement plan sponsors, going forward.


  • Distributions of excess contributions: Distributions of excess contributions and the earnings on the excess contributions from an IRA are not subject to the 10% Early Withdrawal penalty.
  • Matching contributions can be made on a Roth basis: An employer may designate matching contributions as Roth contributions. Previously, these were required to be made on a pre-tax basis.


  • New RMD Start Date: The Act increases the applicable age at which beneficiaries must begin taking required minimum distributions (RMDs) from retirement plans as follows:
    • For an individual who attains age 72 after December 31, 2022, and age 73 before January 1, 2033, the applicable age is 73.
    • For an individual who attains age 74 after December 31, 2022, the applicable age is 75.
  • Changes to RMD Penalties: Previously, a taxpayer who failed to take an RMD was subject to a penalty of 50% of the RMD amount. The penalty for not taking an RMD is reduced to 25% of the RMD.
  • Solo 401(k) changes: A business owner can establish and fund a Solo 401(k) by the individual tax filing due date. Previously, this was required to be done by December 31st.
  • SIMPLE and SEP Roth IRAs: Employees can treat contributions to SIMPLE IRAs and SEPs as nondeductible Roth contributions.


  • Penalty-free emergency withdrawals: An individual can withdraw up to $1,000 penalty-free from their retirement plan for an emergency. If this amount is not paid back, they cannot make an additional emergency withdrawal for 3 years. The distribution is subject to income tax but can be refunded if the distribution is paid back timely.
  • Penalty-free withdrawals for individuals with terminal illness: A terminally ill individual can take early distributions from their retirement account without being subject to the 10% additional tax on early withdrawals.
  • Penalty-free withdrawals for domestic abuse victims: Domestic abuse victims can take early distributions of up to $10,000 without being subject to the 10% additional tax on early withdrawals.
  • Unused 529 plan balances: Unused 529 plan balances can be rolled over to a Roth IRA. The 529 plan must have been in existence for at least 15 years along with some other requirements.
  • Roth RMDs: The RMD requirement from a Roth employer plan such as a 401(k) is eliminated. This will treat them similarly to Roth IRAs.


  • Automatic Contributions for new 401(k) and certain 403(b) plans: Effective for plan years after December 31, 2024, new 401(k) and certain 403(b) plans must automatically enroll participants (who do not opt-out) using a 3% minimum and 10% maximum contribution rate. Such plans must also provide for an automatic escalation feature that increases employee contributions by 1% per year up to at least 10% (capped at 15% of compensation).
  • Increased catch-up limits at age 60-63: The “Act” increases age-based catch-up limits to the greater of $10,000 or 50 percent more than the regular age 50 catch-up amount in 2025 for participants who have reached ages 60, 61, 62, and 63. This applies to 401(k), 403(b), and governmental 457(b) plans, but cannot be used in addition to 457(b) special catch-up.

The above information pertaining to the Act includes key highlights but is not intended to be a comprehensive list of every provision. The Act has over 90 new retirement provisions that take effect over the next few years. If you have any questions about the above information or want to better understand how the Act may impact you, please reach out to a GBQ tax advisor.


Article written by:
Scott Eichar
   Director, Tax & Business Advisory Services
Charlie May
   Senior, Tax & Business Advisory Services
Jackson Howard
   Rotation Staff

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