Search “max the 401(k)” and you get $24,500. That figure is the 2026 section 402(g) employee elective deferral. A mega backdoor Roth uses leftover space under the section 415(c) annual-additions cap, $72,000 for 2026 per Notice 2025-67. After-tax employee contributions fill that leftover. An in-plan Roth conversion or a rollover then moves those after-tax dollars to Roth. Confirm both steps in the summary plan description before you fund. Most plans close at least 1 of them.
What is a mega backdoor Roth?
A mega backdoor Roth is after-tax employee contributions inside a 401(k), followed by an in-plan Roth conversion or a rollover of those after-tax dollars into Roth.
Roth 401(k) deferrals share the $24,500 section 402(g) cap with pre-tax deferrals. After-tax employee contributions sit outside 402(g) and count toward section 415(c). See 401(k) contribution limits for 2026 for the 3 IRS ceilings.
The IRA backdoor Roth is a different two-step under the IRA contribution limit. This post is the 401(k) leftover.
How does a mega backdoor Roth work?
You fill leftover 415(c) room with after-tax employee dollars, then convert or roll those dollars to Roth so later growth is Roth.
- Elect after-tax employee contributions up to leftover 415(c) room.
- Convert them in-plan to a designated Roth account, or roll them to a Roth IRA.
- Track basis and any earnings that accrued before the conversion.
Notice 2014-54 lets a plan send after-tax amounts to a Roth IRA and pre-tax amounts to a traditional IRA in the same distribution. How a Roth conversion counts as income covers tax on converted pre-tax dollars and on earnings. Converted after-tax basis is recovered tax-free.
An in-plan Roth conversion is reported on Form 1099-R. Form 1099-R reports it.
What is the mega backdoor Roth limit for 2026?
The 2026 mega backdoor Roth room is leftover annual additions under $72,000, after employee elective deferrals and employer money.
Notice 2025-67 set section 415(c)(1)(A) at $72,000. The IRS newsroom published the same 2026 retirement figures. The cap is the lesser of $72,000 or 100% of compensation. Annual additions are employee elective deferrals, employer contributions (match and profit sharing), forfeitures allocated to you, and after-tax employee contributions.
Section 402(g) employee deferrals for 2026 are $24,500. Those deferrals use 415(c) room. Employer dollars use more of it. Catch-up under section 414(v) sits outside 415(c). The 3-ceiling map is in the 401(k) limits post.
Take $24,500 of deferrals and $12,000 of employer money. Annual additions so far are $36,500. Leftover 415(c) room is $35,500 if compensation is at least $72,000. That leftover is the after-tax figure this strategy can fund, if the plan allows it.
Searching “max the 401(k)” at $24,500 stops at 402(g). Leftover 415(c) room can still be open.
Does my 401(k) allow a mega backdoor Roth?
Most plans do not. You need after-tax employee contributions and a way to move those dollars to Roth while you still work there.
Read the summary plan description and ask the administrator 2 questions:
- Does the plan accept after-tax (non-Roth) employee contributions?
- Does the plan permit an in-plan Roth conversion of that after-tax source, or an in-service rollover of after-tax amounts to a Roth IRA?
If after-tax is open and conversion or rollover is closed until you leave the job, earnings will accrue on the after-tax balance. Those earnings are taxable when they later move to Roth.
After-tax employee contributions can also be limited by the actual contribution percentage test under section 401(m). The plan, not the IRS dollar caps, sets whether you can fill leftover room.
Does Form 8606 apply to a mega backdoor Roth?
Form 8606 covers traditional, SEP, and SIMPLE IRAs. After-tax 401(k) dollars stay off line 6 while they remain in the plan.
Form 8606 and Publication 590-A cover traditional, SEP, and SIMPLE IRAs. Line 6 of Form 8606 is the December 31 value of those IRAs. A 401(k) is a qualified plan, so it stays off that line. The backdoor Roth post is the Form 8606 pile.
If you roll after-tax 401(k) dollars into a traditional IRA, those dollars enter that pile. Send after-tax plan dollars to Roth, not to a traditional IRA, if you want them out of Form 8606.
Basis has to be tracked. The plan keeps the after-tax subaccount. A distribution or conversion reports basis and earnings on Form 1099-R. Publication 575 covers how after-tax basis comes out of a qualified plan.
Are earnings on after-tax 401(k) contributions taxable?
Yes. Earnings that accrue on after-tax 401(k) dollars before conversion or rollover are taxable as ordinary income. Converted after-tax basis is recovered tax-free.
Convert or roll soon after the after-tax dollars post, and the earnings amount stays small. Leave after-tax money invested for months, and the growth is the taxable part of the later move to Roth. How a Roth conversion counts as income walks through that split.
The conversion of those earnings also raises AGI. What MAGI is covers the MAGI tests that start from AGI.
Do not roll after-tax 401(k) basis and earnings into a traditional IRA and then treat a later IRA conversion as if Form 8606 will ignore the IRA pile. That move recreates the backdoor Roth aggregation problem on a larger balance.
Can you do a backdoor Roth and a mega backdoor Roth in the same year?
Yes. They use different statutes and different accounts.
The IRA backdoor Roth uses the 2026 IRA contribution limit of $7,500 ($8,600 at age 50 or older). The mega backdoor Roth uses leftover 415(c) room inside a 401(k). Filling the IRA two-step leaves leftover 415(c) room untouched. Run Form 8606 for the IRA two-step. Run leftover 415(c) math and the SPD for the plan two-step.
How does Nino check leftover 415(c) room?
Nino maps section 402(g), employer dollars, and leftover section 415(c) room against the plan document and the household file, with a CFP and a CPA on the same numbers for 1 flat annual fee.
The work is whether after-tax is open, whether conversion or rollover is open, and how much earnings would be taxable if you wait.
Book a demo if you want that map before you change elections. Every Advisor Plan includes a 30-day money-back guarantee.