What is a mega backdoor Roth?

It is an after-tax (non-Roth) 401(k) contribution followed by an in-plan Roth conversion or an in-service rollover to a Roth IRA. In 2026 the Section 415(c) annual-addition limit is $72,000. Subtract elective deferrals and employer money; the remainder is theoretical after-tax room. Catch-up under IRC 414(v) sits outside 415(c).

Is a mega backdoor Roth the same as a regular backdoor Roth IRA?

No. The regular backdoor is a nondeductible traditional IRA contribution plus a conversion. The IRA aggregation (pro-rata) rule applies to every traditional, SEP, and SIMPLE IRA you own. Mega lives inside the 401(k). IRA pro-rata does not tax the 401(k) after-tax piece. Mixing the two in your head is how people roll after-tax 401(k) money into a traditional IRA and create a mess.

Does MAGI block a mega backdoor Roth?

No. There is no MAGI phase-out on after-tax 401(k) contributions. High earners use mega because the Roth IRA front door and sometimes the regular backdoor are ugly, not because mega requires high MAGI. You still need cash flow, a plan that actually offers both features, and payroll that will take the after-tax source.

What two plan features do I need?

Both: (1) voluntary after-tax employee contributions, which are not the same as Roth 401(k) deferrals, and (2) a way to move that money into Roth quickly — in-plan Roth conversion (IRC 402A) or an in-service withdrawal/rollover to a Roth IRA. One without the other is just a taxable-earnings bucket sitting in the plan.

Why convert immediately?

Earnings that accrue in the after-tax source are pre-tax. Convert or roll the same week as the payroll hit and the taxable slice is usually pennies. Leave it for a year in a bull market and you owe ordinary income on the growth. Basis (what you contributed) is not taxed again.

Home · Learn · Mega backdoor Roth

Retirement · Taxes

Mega backdoor Roth: the 401(k) move that is not the IRA backdoor

The regular backdoor is a $7,500 IRA trick with a pro-rata trap. The mega is an after-tax 401(k) contribution plus a conversion path, sized off the $72,000 annual-addition cap. Different form, different employer, different failure modes. If your SPD does not name both features, you do not have a mega. You have a slogan.

Updated 2026-09-08 · 12 min read · Educational, not tax advice. Run the mega backdoor calculator with elective deferrals, employer money, and the after-tax you can actually afford.

Two backdoors, one word that should not be shared

	Regular backdoor	Mega backdoor
Account	Traditional IRA → Roth IRA	After-tax 401(k) source → Roth 401(k) or Roth IRA
2026 size	$7,500 / $8,600 at 50+	Leftover 415(c) room under $72,000
MAGI test	Yes, for a direct Roth. Backdoor skips it, then pro-rata appears.	None on the 401(k) piece
Pro-rata	All traditional / SEP / SIMPLE IRAs you own	Does not apply to the 401(k) after-tax source
Who offers it	Any IRA custodian	Only plans with after-tax and a conversion/rollover path

People google “backdoor Roth” and land on mega copy, or the reverse. The regular backdoor does not need your employer. Mega does not care about leftover IRAs — unless you dump the after-tax 401(k) into a traditional IRA, which you should never do.

Worked slice

$24,500 deferral, $9,000 match

415(c) $72,000 − $24,500 − $9,000 = $38,500 of theoretical after-tax room. Age-50 catch-up of $8,000 sits outside that $72,000. If you can write the check and payroll will take it, that is the mega.

The usual “no”

Roth 401(k) is not after-tax

Roth deferrals eat the $24,500 elective cap. After-tax is a third source: not pre-tax, not Roth-elective. If HR says “we have Roth” and the SPD never says “after-tax employee contributions,” you do not have mega.

The 2026 math is subtraction, not a slogan

Section 415(c) annual additions for 2026 are $72,000 (Notice 2025-67). Counted: elective deferrals (pre-tax and Roth 401(k)), employer match, profit sharing, nonelective, and after-tax employee money. Not counted: age-50 / 60–63 catch-up under 414(v). That is why the calculator keeps catch-up on its own line.

Elective deferral cap: $24,500. Fill this (or as much as cash flow allows after the match) first.
Catch-up: $8,000 at 50+; $11,250 at ages 60–63. Separate bucket. See catch-up.
Employer money: whatever actually hits the plan this year, not last year’s estimate.
After-tax room = $72,000 − elective (not catch-up) − employer. That is the ceiling, not a target.

A 1099 / solo 401(k) can do this only if the document allows after-tax plus in-plan Roth or in-service distribution. Most cheap solo providers do not. Employer profit-sharing you make as the owner still eats 415(c) — see self-employed taxes.

You need both plan features. “Roth” is not enough.

Open the summary plan description, not a Slack thread.

After-tax employee contributions. Sometimes labeled “voluntary after-tax” or “non-Roth after-tax.” Must be a separate source from Roth elective.
A conversion path. In-plan Roth conversion of that source, or in-service withdrawal that can be rolled to a Roth IRA while you still work there. Some plans allow conversion only of after-tax; some allow everything. You only need the after-tax slice.

ACP testing can choke after-tax for highly compensated employees if the plan is not designed for this (safe-harbor plus a real after-tax source is the usual pattern). If last year’s after-tax refunded in April, the plan does not actually support mega at your pay band. Ask before you re-set payroll.

Convert the same week. Earnings are the tax.

Basis (the after-tax dollars you put in) comes out tax-free. Growth in that source is ordinary income when you convert. A same-week in-plan conversion or rollover keeps growth near zero. A “I’ll do it at year-end” habit in a 20% year is how a $38,000 mega becomes a four-figure 1099-R surprise.

The Form 1099-R typically shows gross in box 1, taxable earnings in box 2a, and the after-tax basis in box 5. In-plan conversions still generate the form. Keep it with the return even if taxable is $12.

Hard-stop list

Rolling after-tax 401(k) to a traditional IRA. That dumps basis into the pro-rata pile the regular backdoor is trying to avoid.
Treating Roth 401(k) deferrals as mega room.
Funding mega by emptying the emergency fund or skipping the match.
Ignoring 2026 Roth catch-up: if prior-year Social Security wages from that employer exceeded $150,000, age-50+ catch-up must be Roth. That is not mega. It is a different SECURE 2.0 rule on the catch-up line.
Assuming a new job’s 401(k) has the same two features. Re-read the SPD.

Order of operations

Match. Then high-APR debt. Then a cash floor. Mega is optional capacity, not step one. Same stack as 401(k) vs IRA vs Roth.
Confirm both features in writing. Payroll source code for after-tax, and the conversion button or in-service form.
Fill elective + catch-up. Then size after-tax off leftover 415(c), then off what you can save without raiding reserves.
Convert or roll each payroll, or on a standing weekly instruction if the recordkeeper allows it.
If you also want a regular IRA backdoor, keep that IRA empty of pre-tax money. Mega does not fix a dirty IRA, and a dirty IRA does not block mega.

Related decisions

The $7,500 door is backdoor Roth IRA. Leaving a job with after-tax money in the old plan is a split rollover — 401(k) rollover. Solo 401(k) vs SEP capacity is on the 1099 tax guide.

Free tool

Mega backdoor calculator

415(c) leftover, catch-up on its own line, tax on unconverted earnings, shareable URL.

PayPal

Do not step on a rake

SPD checklist, payroll source, same-week conversion, 1099-R boxes, solo-plan trap.

Not tax, legal, or investment advice. Confirm Notice 2025-67, your SPD, and Form 1099-R instructions. Premium restore: /account.