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Set up employees and payroll items

Retirement plan payroll item limits

The application handles many types of retirement plan deductions, along with company matching amounts, and automatically adjusts the annual limits for various retirement plans. This includes the following types of retirement plans:
  • 401(k)
  • 403(b)
  • 457
  • Roth 401(k)
  • Roth 403(b)
  • Simple 408(p)

Increased catch-up limits

Certain provisions allow eligible employees to contribute beyond the standard annual limits to help boost their retirement savings.
  • Standard catch-up limit:
    • This applies to employees that are aged 50-59, or 64 and older.
    • The employees need to be this age as of the date of the payroll check.
  • Enhanced catch-up limit:
    • This applies to employees that are aged 60, 61, 62, or 63 due to provisions from the SECURE 2.0 Act.
    • The employees must be this age by the end of the calendar year.
    • The enhanced catch-up limit is $10,000 or 150% of the standard catch-up limit, whichever is greater.
note
You'll need to enter a birth date for each employee on the
Personal
 tab of the
Employee
 screen for the application to automatically increase their annual contribution limit.
You can make the employee birth date a required field by following these steps:
  1. Select
    Setup
    ,
    Firm Information
    , and then
    Firm
    .
  2. Go to the
    Preferences
     tab.
  3. Mark the
    Require Birth date if active retirement plan deduction
     checkbox.
The maximum annual compensation limit (for example, $350,000 for 2025) is not considered in the application. For more information, refer to IRS guidance.

Adjust limit calculations

Do the following to turn off the catch-up limit and/or calculate the deduction without the cafeteria 125 deduction amount included.
  1. Select
    Setup
    ,
    Employees
     and then go to the
    Payroll Items
     tab.
  2. Select the ellipsis button in the row for the retirement plan deduction item.
  3. On the
    Main
     tab, mark the
    Do not apply catch-up limit
     checkbox and/or the
    Subtract cafeteria 125 deduction before calculating
     checkbox.
    note
    For Simple 408(p) deductions, you can also mark the
    Increased deferral limit (SECURE Act 2.0)
     checkbox. Marking this checkbox increases the contribution limits by 10%.
  4. Select
    OK
    , and then
    Enter
     to save your changes to the employee.

Contributions to both traditional and Roth 401(k)

If an employee makes contributions to both a traditional and Roth retirement plan, you'll need to keep both deduction items active on the employee for the application to make sure that the shared annual contribution limit isn't exceeded.

This article applies to:

  • Product: Accounting CS Client Access
  • Subject: Payroll checks

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