401k company match and catchup for employees 50 and over

Establish a catch-up retirement payroll item first, then add a company-match contribution, vthornton. I can assist you through the process to ensure correct tracking of your employee’s plan and accurate tax computation.

You can start by determining the retirement plan you wish to set up for your employees and review its contribution limits. Below are the ones that QuickBooks supports:

• 401(k) / 401(k) catch-up
• Simple 401(k) / Simple 401(k) catch-up
• 403(b) /403(b) catch-up
• SARSEP / SARSEP catch-up
• Simple IRA / Simple IRA catch-up
• After-tax Roth 401(k)
• After-tax Roth 403(b)
• Company-only plan

After identifying the plan, proceed with the following steps to add a retirement plan deduction or a company-match contribution item to your employee’s profile:

1. Go to the Payroll menu on the left panel, then Employees.
2. Locate their name to open their profile.
3. Scroll down to the Deductions & contributions, and select Start or Edit.
4. A new window will appear when you click + Add deduction/contribution.
5. Choose Retirement Plans in the Deduction/contribution type▼dropdown.
6. For Type, determine the applicable retirement plan.
7. Enter the provider or plan name in the Description (appears on the paycheck) field.
8. Complete the remaining fields.
9. Since you have a company match, select the dropdown menu to choose how to calculate the amount under the Company contribution. Fill in the new fields to enter the amount or percent per paycheck and annual maximum.
10. Click Save, then Done.

Please know that the Form W-2 reports contributions you and your workers made towards a retirement plan. Therefore, ensure that the amounts are reflected in their paychecks on their next pay.

Furthermore, check out Step 3 in this article to track the contributions: Set up or change a retirement plan. It provides guidance in modifying or eliminating a deduction or contribution item.

Lastly, you can generate, print, and customize payroll reports to know your business standing and financial health.

Letting workers save for retirement through payroll allows them to accumulate additional funds for their future. Add any clarification about the process below so I can help you further. Happy holidays!

Please help, quickbooks online payroll does not allow both 401K catch up retirement plan and 401K match by employer. When you try to add both, you get an error message:  "Your employee cannot have 401(k) Catch-up and 401(k). If you would like to add 401(k), please delete 401(k) Catch-up."  Please suggest the right way to do this so employees over 50 and also get company match.  Thanks

I'll explain why you're receiving an error when adding two 401(k) plans and share how you can appropriately handle this situation below, oaklandsmile.
 
Please know that you can only select one deduction from your 401(k) plan for your workers in QuickBooks Online (QBO) Payroll. That's why you're encountering the error you've mentioned when adding a Catch-up contribution.
 
To address this situation, you'll have to determine which type of retirement contribution you'll have to use for your employees. If unsure, you can check with the IRS or tax expert to ensure you've set up the accurate plan for them.

If you need to use the Catch-up, you'll have to delete the regular 401(k) and add the 401(k) Catch-up to your employee's profile. The year-to-date amount of the removed 401(k) item remains in your records. Its balance will be applied to the new (Catch-up) plan you generate.

Refer to these steps to proceed:

1. Go to the Payroll menu, then Employees.
2. Choose the employee from the list.
3. Scroll down to the Deductions and contributions section and click Edit.
4. Tick the designated Trash Bin icon for the 401(k) retirement plan.
   
5. Confirm the action by hitting Delete.

After that, generate the 401(k) catch-up retirement contribution:

1. Click the + Add deduction/contribution option.
2. Choose + Add deduction/contribution from the Deduction/contribution dropdown.
3. From the Deduction/contribution type, select Retirement plans.
4. Pick 401(k) Catch-up as its Type.
5. Add a Description and complete the rest of the page accordingly.
   
6. Once done, hit Save.

Deleting the regular 401(k) and adding the 401(k) Catch-up item to your 50+ employees allows them to contribute to the plan while still receiving the company match. For more information about managing retirement contributions, check out this link: Set up or change a retirement plan.

I'm also adding these articles that can help you gather more insights about the Catch-up plan and running payroll reports in QuickBooks:

• Retirement topics - Catch-up contributions
• Run payroll reports

Finally, if you're using QBO Payroll Core, you might want to explore our Payroll Premium and Elite offerings. Both subscriptions have advanced features that could be helpful for your business needs.

You can always reply to this thread if you have further queries about handling worker's 401(k) in QBO Payroll. We're always delighted to help.

Hi, thank you for your reply!

The issue seems to be that the system doesn't allow both a 401(k) Match contribution and a 401(k) Catch-Up contribution simultaneously. I had already deleted the regular 401(k) plan and replaced it with the 401(k) Catch-Up for this year. For employees under 50, I had no issues using both the regular 401(k) plan (employee payroll deduction) and the 401(k) Match (company contribution). However, when I switched from the regular 401(k) to the Catch-Up option to meet the correct annual maximum of $31,000, I encountered an error message.  I want all my employees to have both 401(K) and 401(K) Match and a few of my employees over 50 years old also wants to contribute to the maximum amount of $31,000 as opposed to $23,500.  Is the tracking of 401(K) Match the problem?  But it worked for employees under 50 for the past few years so really don't know where the bug is.  Any suggestions to how to fix this?  Thank you.

Hi, oaklandsmile. We understand how crucial it is for you to handle these 401(k) contributions through QuickBooks Online (QBO) Payroll accurately, and I'm here to provide you with clear guidance.

Based on the error message you got earlier, "Your employee cannot have 401(k) Catch-up and 401(k). If you would like to add 401(k), please delete 401(k) Catch-up", this means that QuickBooks currently does not support the simultaneous addition of both standard 401(k) and 401(k) Catch-up contributions for the same employee. You will need to select either of the options based on the employee's preference and eligibility while adhering to IRS contribution limits.

Please be informed that whichever option you select, the contributions will count towards the annual maximum allowed. If these contributions reach or exceed the limit, QBO Payroll is designed to reliably adjust the deduction amount in that pay cycle to ensure compliance with contribution limits. (You should be able to see this note on the same page with the error message. Please refer to the image below.)

For a clearer understanding of how these contribution limits are structured, you can visit the section Learn about employee contribution limits in this article: Set up or change a retirement plan. 

Should you have any more questions or concerns related to contributions, we're here to offer further help.

I am having this issue to and can't figure it out.

Why can you add the 401k Co. Match & 401k Emp.

But not add 401k Co. Match & 401k Emp. Catch-up

All three of them are pretax contributions.  For EEs under 50 it works as it has for years and you add the two payroll items.  But for EEs over age 50 it will not let you add the two together.

This is a QuickBooks error, if it works for under 50 it should work for over 50.  The only difference between the 401k Emp. and 401k Emp. Catch-up is the annual limit of $23,500 or $31,000.

Did this ever get resolved?  Seems as thought QBO is erroring out and I can't get it to work either.

Thanks for joining this thread, ckramer8.

I want to make sure you're able to get 401K company match and catchup set up up for your employees in QuickBooks Online.

If the issue is persisting even after trying the suggestions mentioned above I recommend reaching out to a member of the QuickBooks Online Support Team. Agents have specialized tools, like the ability to share your screen, to take a more in depth look at what could be causing this error. Additionally, they'll be able to get the problem escalated further, if need be. You can reach the team by selecting Contact Us in the Search tab.

The following article provides details about getting help with QuickBooks products and services if you ever need it in the future.

Please don't hesitate to drop a comment below if you have any other questions. I'll be here to help in any way that I can.