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Level 2

Payroll Items

So we have an employee that has a Roth 403b that we pay for them automatically monthly. How do I set that that up in QuickBooks as NOT a deduction from their paycheck and yet as part of the employee's salary allowance?  Also want it to show the YTD on each paystub.

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Best answer January 24, 2020

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Moderator

Payroll Items

I'm here to help with your Roth 403b question, @spcc.

 

You can create a zero net paycheck to contribute to the retirement plan without creating a deduction. It's super easy and takes only a few moments. Check it out:

 

  1. Setup a 401(K) Retirement plan deduction item if they do not already have one.
  2. Go to Employees then select Pay Employees. Choose Unscheduled Payroll.
  3. Choose an employee then select Paycheck Details.
  4. Enter the Earnings Item as the amount of wages the employee has made.
  5. In the Other Earnings section enter the Retirement Item.
    NOTE: You will need to adjust these items amount until the amount of the Net is $0.00
  6. Select Save & Close then Create Paychecks. Select Send Payroll Data (if applicable).
     

 

If there are NOT enough wages to cover the full Retirement Contribution, and the employee is contributing the amount with personal/outside money:
 

  1. Setup a 401(K) Retirement plan OFFSET deduction item.
    NOTE: Name this something like 401(k) Offset, use the Tax Tracking Type of NONE.
  2. Go to Employees then select Pay Employees. Choose Unscheduled Payroll.
  3. Choose an employee then select Paycheck Details.
  4. In the Other Earnings section enter the Retirement Item and the amount they are contributing.
  5. In the Other Earnings section enter the Retirement OFFSET Item as a POSITIVE amount.
    NOTE: You might be prompted with the message "Deductions are normally entered as a negative number, are you sure you want to have a positive number?" Select Yes.
  6. Select Save & Close then select Create Paychecks. Select Send Payroll Data (if applicable).

 

I also recommend checking out the IRS' FAQ on Designated Roth Accounts for more information on how to remain compliant with the rules and regulations.

 

That's it! Please let me know if there's anything else I can do to be of assistance. Cheers to a safe and productive week ahead!

View solution in original post

1 Comment 1
Highlighted
Moderator

Payroll Items

I'm here to help with your Roth 403b question, @spcc.

 

You can create a zero net paycheck to contribute to the retirement plan without creating a deduction. It's super easy and takes only a few moments. Check it out:

 

  1. Setup a 401(K) Retirement plan deduction item if they do not already have one.
  2. Go to Employees then select Pay Employees. Choose Unscheduled Payroll.
  3. Choose an employee then select Paycheck Details.
  4. Enter the Earnings Item as the amount of wages the employee has made.
  5. In the Other Earnings section enter the Retirement Item.
    NOTE: You will need to adjust these items amount until the amount of the Net is $0.00
  6. Select Save & Close then Create Paychecks. Select Send Payroll Data (if applicable).
     

 

If there are NOT enough wages to cover the full Retirement Contribution, and the employee is contributing the amount with personal/outside money:
 

  1. Setup a 401(K) Retirement plan OFFSET deduction item.
    NOTE: Name this something like 401(k) Offset, use the Tax Tracking Type of NONE.
  2. Go to Employees then select Pay Employees. Choose Unscheduled Payroll.
  3. Choose an employee then select Paycheck Details.
  4. In the Other Earnings section enter the Retirement Item and the amount they are contributing.
  5. In the Other Earnings section enter the Retirement OFFSET Item as a POSITIVE amount.
    NOTE: You might be prompted with the message "Deductions are normally entered as a negative number, are you sure you want to have a positive number?" Select Yes.
  6. Select Save & Close then select Create Paychecks. Select Send Payroll Data (if applicable).

 

I also recommend checking out the IRS' FAQ on Designated Roth Accounts for more information on how to remain compliant with the rules and regulations.

 

That's it! Please let me know if there's anything else I can do to be of assistance. Cheers to a safe and productive week ahead!

View solution in original post

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