The short answer
A mega backdoor Roth means making after-tax (non-Roth) contributions to your 401(k) above the normal deferral limit, then promptly converting them to Roth, either inside the plan or by rolling them to a Roth IRA. In 2026, total contributions to one employer’s plan can reach $72,000, so the room left after your own deferrals and your employer’s contributions can go in after-tax.
| 2026 limits | Amount |
|---|---|
| Your 401(k) deferrals, pre-tax or Roth | $24,500 |
| Total contributions to the plan from all sources, before catch-ups | $72,000 |
| Maximum after-tax room if your employer contributes nothing | $47,500 |
| Catch-up, age 50+ (on top of the $72,000) | $8,000 |
| Catch-up, ages 60–63 (instead of $8,000) | $11,250 |
| From 2026, if your prior-year wages from the employer exceeded $150,000, catch-up contributions must be made as Roth. | |
Source: IRS Notice 2025-67. 2027 limits have not been announced yet; benefits consultants such as Milliman project $25,500 and $75,000.
How the mega backdoor Roth works
Most people know two kinds of 401(k) contributions: pre-tax and Roth. Some plans offer a third, after-tax contributions. They don’t reduce your taxable income today, and on their own they aren’t especially useful, because the growth is taxed as ordinary income when it comes out. The value comes from converting them to Roth quickly, so future growth is tax-free.
- Max out your regular deferral ($24,500 in 2026), pre-tax or Roth.
- Find your room. Subtract your deferrals and your employer’s match or profit-sharing from $72,000. What’s left can go in as after-tax contributions.
- Contribute after-tax through payroll, up to that room and whatever your plan’s own cap allows.
- Convert to Roth, either with an in-plan Roth conversion to your Roth 401(k) or with an in-service withdrawal rolled to a Roth IRA. The sooner you convert, the less taxable growth builds up first.
There is no income limit, which is why the strategy appeals to executives and business owners who earn too much to contribute to a Roth IRA directly.
Does your plan allow it?
The strategy depends entirely on plan features. Check your summary plan description or ask HR for three things:
- After-tax contributions. Not the same as Roth 401(k) contributions. Many plans don’t offer them.
- A way to convert. Either in-plan Roth conversions or in-service withdrawals of after-tax money that you can roll to a Roth IRA. Some plans convert automatically after each paycheck, which keeps taxable earnings near zero.
- The plan’s own cap. Some plans limit after-tax contributions to a percentage of pay, which can leave you short of the full IRS room.
Highly compensated employees, read this
After-tax contributions are included in the plan’s nondiscrimination test for matching and after-tax contributions (the ACP test), even in safe harbor plans, because the safe harbor covers matching contributions but not after-tax contributions. If lower-paid employees don’t contribute enough, the plan may refund part of what highly compensated employees put in after-tax. Ask the plan whether that has happened in prior years.
A worked example
Michael is 45, earns $300,000, and his employer matches 6% of pay. His plan allows after-tax contributions and automatic in-plan Roth conversions.
| 2026 contributions | Amount |
|---|---|
| Michael’s 401(k) deferral | $24,500 |
| Employer match (6% × $300,000) | $18,000 |
| After-tax contributions, converted to Roth | $29,500 |
| Total, at the $72,000 limit | $72,000 |
If Michael adds $29,500 a year for 10 years and it earns 6% a year, he would have about $388,800 in Roth savings, including about $93,800 of growth that can come out tax-free in retirement once he is 59½ and meets the five-year rule. Without the conversion, that growth would eventually be taxed as ordinary income.
Hypothetical and simplified for illustration, assuming contributions at the end of each year and a constant 6% return. Actual returns vary and are not guaranteed. Michael’s match counts toward the $72,000 limit even though it is typically made pre-tax. Because Michael is a highly compensated employee, his plan’s ACP test could limit how much of the $29,500 he can keep in.
Not sure your plan supports it?
Send us your summary plan description. We’ll confirm what it allows, work out your after-tax room, and fit it alongside the rest of your tax plan.
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- Earnings before conversion are taxable. Your after-tax contributions have already been taxed, but any growth before you convert is taxed as ordinary income when converted. Converting each paycheck, or at least often, keeps that small.
- Splitting a rollover. If you take after-tax money out of the plan, IRS Notice 2014-54 lets you send the contributions to a Roth IRA and the pre-tax earnings to a traditional IRA in the same distribution, so you don’t have to pay tax on the earnings now.
- Pre-tax money in the plan. Withdrawals generally come out pro rata from your account, so check whether your plan tracks after-tax money as a separate source you can withdraw on its own.
- No IRA pro-rata problem. Unlike the regular backdoor Roth IRA, pre-tax balances in your IRAs don’t make an in-plan conversion taxable.
Mega backdoor Roth vs. backdoor Roth IRA
| Mega backdoor Roth | Backdoor Roth IRA | |
|---|---|---|
| 2026 amount | Up to $47,500, less employer contributions | $7,500 ($8,600 at 50+) |
| Needs | A 401(k) with after-tax contributions and a way to convert | Any earned income; no plan needed |
| Main trap | Taxable earnings before conversion; HCE refunds | Pre-tax IRA balances make the conversion partly taxable |
| Income limit | None | None for the conversion |
If you qualify for both, you can do both in the same year. The IRA limit is separate from the 401(k) limits.
Is it worth it?
It may make sense when you are already maxing out your deferral, have cash flow to spare, and expect to hold the money for years. Roth 401(k) balances no longer have required minimum distributions during your lifetime, and Roth money can be a strong asset to leave to heirs. It may be less useful if you need the money soon, if your plan’s investment options are weak, or if your plan keeps refunding after-tax contributions. Self-employed owners can sometimes use it too, through a solo 401(k) whose plan document allows after-tax contributions and conversions.
Pennsylvania residents
Pennsylvania doesn’t follow the federal treatment of 401(k) contributions: it taxes your employee contributions when you make them, whether they are pre-tax or after-tax for federal purposes. So the state picture for this strategy differs from the federal one. Confirm how your conversions should be reported with your CPA, and see our Pennsylvania retirement tax guide.
Frequently asked questions
What is a mega backdoor Roth?
A mega backdoor Roth is a way to put extra money into Roth accounts by making after-tax contributions to a 401(k) above the regular deferral limit and then converting them to Roth, either inside the plan or by rolling them to a Roth IRA. It works only if your plan allows after-tax contributions and in-plan conversions or in-service withdrawals.
How much can I put in a mega backdoor Roth in 2026?
Up to $72,000 minus your own deferrals and your employer’s contributions. With the full $24,500 deferral and no employer contributions, that leaves $47,500. Catch-up contributions for people 50 and older are on top of the $72,000 limit. Your plan may also set a lower cap on after-tax contributions.
Are there income limits for a mega backdoor Roth?
No. Unlike direct Roth IRA contributions, after-tax 401(k) contributions and Roth conversions have no income limit. High earners can face a different constraint: if the plan fails its nondiscrimination test, highly compensated employees may have some after-tax contributions refunded.
Do I pay tax on a mega backdoor Roth conversion?
You pay no tax on the after-tax contributions themselves, since they were already taxed. Any earnings on them before you convert are taxed as ordinary income. Converting soon after each contribution keeps the taxable amount small. If you roll the money out of the plan, IRS rules let you send the contributions to a Roth IRA and the earnings to a traditional IRA.
Can I do a mega backdoor Roth and a backdoor Roth IRA in the same year?
Yes. The IRA contribution limit is separate from the 401(k) limits, so you can do both if you qualify. The backdoor Roth IRA has its own trap: pre-tax balances in any traditional, SEP, or SIMPLE IRA can make part of that conversion taxable.
What are the 2027 mega backdoor Roth limits?
The IRS had not announced 2027 limits as of early November 2026. Benefits consultants such as Milliman project the deferral limit to rise to $25,500 and the total contribution limit to $75,000, which would raise the maximum after-tax room to $49,500. This page will be updated after the IRS releases the official figures.