Employee Roth Contributions for SIMPLE IRA

Hi there, @Lstall31.

Currently, you can only set up SIMPLE IRA contributions in QuickBooks Desktop. This is because a SIMPLE IRA cannot be a Roth IRA as per the IRS. You can read more about the SIMPLE IRA plan on the IRS website.

If you wish to proceed with setting up a SIMPLE IRA payroll item, you can follow the steps below.

1. Go to Lists, then press Payroll Item List.
2. Click the Payroll Item dropdown, then choose New.
3. Select Custom Setup, then Next.
4. Select Deduction or Company Contribution, then Next.
5. Enter the name of the deduction or company matching item, then click Next.
6. Select the name of your retirement plan provider, or add it, and enter the account number. In the Liability account field, select the account that tracks the deduction or contribution to be paid. Select Next.
   • For company match items, in the Expense account field, select the account that you want to track the item. Select Next.
7. In the Tax Tracking Type window, select the applicable retirement plan. Select Next twice.
8. Under Calculate based on quantity, select Neither and select Next.
9. Leave the Default Rate and Limit fields blank. You can add the rate and limit when you add the item to the employee profile
10. Tap Finish.

Once done, add the items to the employee profile. Here's how:

1. Go to Employees, and then hit Employee Center.
2. Select your employee.
3. Select Payroll Info, then add the retirement plan items in the Additions, Deductions, and Company Contributions section.
4. Enter the amount per period and the limits.
5. Select OK, when you're done.

For more information on setting up a retirement plan, check out this article: Set up or change a retirement plan. You can also find detailed steps on how to edit a plan in it.

If you ever need assistance with filing your taxes using QuickBooks, these resources will come in handy for you:

• Create and file 1099s with QuickBooks Desktop
• File your W-2 and W-3 forms

If you have any other concerns regarding setting up a retirement plan or filing your taxes, please feel free to leave a reply below. The Community is always available to offer assistance and support for any additional help you may need.

As @Lstall31 pointed out, the IRS now allows (as of January 2023, a year ago) a Roth Simple IRA. So the question remains, how can such a retirement plan be properly setup within Quickbooks Desktop?

Hello there, jzp1.

Please know that QuickBooks Desktop allows you to set up various retirement plans. However, creating a Roth Simple IRA in the application is still unavailable. This is because a SIMPLE IRA cannot be a Roth IRA based on the IRS regulations. You can refer to this website to see further details: IRS website. I'll ensure you can send feedback so your suggestion is passed to our Development Team.

I suggest submitting ideas regarding the ability to set up a Roth Simple IRA in QuickBooks to manage the retirement plan you need. The recommendations are sent to our engineer for consideration in future updates. 

Here's how:

1. Choose the Help option and select the Send Feedback Online option.
2. Select the Product Suggestion option. A pop-up window displays.
3. Enter your feedback suggestion.
4. Click the Send Feedback button. The feedback is sent.

While waiting for the said plan to be available in QuickBooks, you can choose the supported retirement below as a workaround.

• 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

Then, you can follow the methods outlined in this article to manually set up those plans in the program: Set up or change a retirement plan.

Additionally, run a company contribution report to track your company-paid contribution. For more details, you can review this link: Run payroll reports.

Please don't hesitate to mention my name in the comment section below if you still have concerns related to my retirement plan. I'll make sure to get back to you as soon as possible, jzp1. Have a good day, and be safe!

Thank you @ChristieAnn , I guess the issue is that as far as I can tell, two IRS websites have contradictory information. In the one you linked in your answer it says "A SIMPLE IRA cannot be a Roth IRA". However, in another location where it discusses 2022 Secure Act 2.0 it says, A SIMPLE IRA can be set up as either pre-tax (traditional) or after-tax (Roth). Looks like a question for my accountant.

Has anyone found a way to properly add these deductions to QuickBooks payroll?? Since a Roth Simple IRA is not an option. 

Hi AnneMariee, I am inquiring about any payroll updates to accommodate the new changes, making Roth Simple IRA's is now going into effect. I have just run a payroll update and couldn't see anything available option. Do you know if there will soon be a payroll update to accommodate a Roth Simple IRA?

Hi AnneMariee, I am just inquiring about any update regarding this issue since this will be changing in 2025. Do you know of any updates in the works to accommodate the new Roth Simple IRA option?

Setting up a Roth Simple IRA is still not available in QuickBooks Desktop Payroll, Lisa. Allow me to provide some additional context about this.

Our Compliance Team is actively working on implementing these changes to ensure that QuickBooks Desktop Payroll fully aligns with the new requirements. The process involves careful consideration and integration of the complex regulations introduced by SECURE 2.0.

To help you stay informed about the implications of this new legislation, I recommend reviewing the following resources that provide detailed information about the SECURE 2.0 Act:

• SECURE Act 2.0: Small business owner guide and key retirement changes
• Consider a Roth IRA for a less taxing retirement

We'll definitely let you know once we have everything for Secure 2.0.

In the meantime, I'll share this article in case you need additional guidance while you are going through your payroll-related year-end tasks: Year-end checklist for QuickBooks Desktop Payroll.

We appreciate your patience as we work to incorporate these important updates. The Community is always available if you have any questions or challenges while managing employees in QuickBooks. It's a great place to seek advice, share experiences, and receive support from both the QuickBooks Team and other users.