Entering one time pre tax 401K contribution to a single paycheck

Hi there, @tandtoz.

In order to create a one-time pre-tax 401(k) contribution to a single paycheck, we'll have to generate a zero net paycheck. Let me help you with this. 

When creating one, please know that a zero net paycheck for your 401(k) contribution is considered a deferred wage or elective deferral and is not subject to federal income tax withholding at the time of deferral. However, it's included as a wage subject to Social Security (FICA), Medicare, and Federal Unemployment Taxes (FUTA). For more information, please refer to the IRS website on reporting elective deferrals: 401(k) Plan Overview.

First, if you haven't set up a retirement plan deduction, you may need to create a 401(k) catch-up on the employee's information page. After this, we'll have to create a payroll item and assign an employee to it. This is to offset the regular pay.

1. Go to Payroll.
2. Select Employees and click on Edit payroll items.
3. Add a New payroll item and choose Pay type.
4. From the dropdown menu, select Other Earnings, and name it "Taxable offset." 
5. Select Create.
6. Click on Assign and choose the employee you'll pay.
7. Leave blank the amount field. 
8. Hit Save.

Next, we'll have to run payroll and edit the paycheck.

1. On the Employees page, select Run payroll and choose the employee.
2. On the Run payroll window, click on Salary (or Regular pay) and choose Skip salary this time only.
3. Enter the regular pay amount in the Taxable offset field. I suggest taking into account the gross formula or the taxes and deductions that will be subtracted from your Gross pay to know the amount you'll enter.
4. Scroll all the way to the right. Click on the three dots under the Actions column.
5. Choose Edit paycheck.
6. Enter the amount for the 401(k) catch-up.
7. Under Employee taxes, zero out the federal and state income taxes.
8. Hit Save.
9. Proceed by following the onscreen steps.

Just a heads up, it's important to consult with a tax professional to ensure compliance with tax laws and regulations while performing the steps above.

Additionally, let me add this article for a detailed breakdown of the paychecks generated by running a payroll report: Run payroll reports.

You're always welcome in the Community if you have updates on creating a zero net paycheck in QBO. We're always here to assist. Take care.

Thanks for your help. When I follow your steps it is still not correct. Is the 401K to be added to the pay or to the deductions section?

Thank you for your response. Went through the steps and the net pay was a negative number so it would not go through. Should the 20K be put in the 401K catch up Pay area or the Deduction area? Tried both ways without success.

Attempting to add a employer end of year 401K contribution to last employee paycheck of 2023.  I don’t want to pay anything I just want to note the 401K contribution. I’ve attempted to have the support staff make this correction but no one know how to at intuit. I’ve called at least a dozen times and have spent hours trying to have them amend the payroll for 12/1/23-12/31/23 to note the contribution. Started this process in 1/5/24. Still not resolved. 

I’ve attempted the above procedure to amend it myself since no one at intuit knows how. but it will not let me generate a check without pay. I don’t need to add pay I need to add 401K contribution. Help please. 

Hi, @Travis72.

I can see that you've been contacting our Support Team back and forth countless times for the same issue. I also understand the importance of noting the 401k contribution through a check without pay.

Repeating your correction concern all over again to every representative you encounter isn't convenient for you. I'll also take note of your experience with them.

Please know a member of our Next Level Help Team will review your comments and recent cases with support. They will contact you within 1-2 business days.

We appreciate your patience as we work on this matter. I'm encouraging you to post back here if anything else comes up. I'll be here to lend a hand. 

A bit confused by this question. I have a solo401K and I record my profit sharing (which I think is what you're talking about here) to an expense account and I don't actually include it at all in payroll. As far as I am aware there's no reason to send this through payroll at all. Just record it to an expense account something like "401K Profit Sharing" and then make the payment from your business account to your Solo401K account and then reconcile that payment there. Someone please correct me if this is somehow an egregious offense to the way this needs to be accounted for, but to my knowledge this really has nothing to do with payroll (except that you can't exceed 25% of your employees' total salary when calculating your profit sharing amount, but that doesn't necessitate payroll per se).