Has anyone setup a 401K ROTH w/employer matching. I am really struggling with this. Have been told it needs to be set-up as a Traditional 401K but I'm not confident that the tax portion will be correct!

I am struggling as well. I need to set up a 401k ROTh the both the employee and employer contributions made after taxes. The traditional 401k makes the contribution before taxes. Any help would be appreciated. This is a new contribution option as of 12/28/2022 but goes into effect Jan 1 2023

I can provide you with the step-by-step process for setting up an employer match for Roth 401K, DT. 

You can follow these steps:

1. Go to the Payroll menu and then select Employees.
2. Select the employee's name and then click the Pencil icon in the Pay section.
3. Scroll down on the deductions section and then click +Add deductions.
4. Click the + Add deduction/contribution and then select Retirement Plans under Deduction/Contribution type. Then select 401(k).
5. Enter the name of the provider and nd the amounts per pay period.
6. Tap Save.

You can take a look at this article: Retirement plan deductions/contributions. This will provide you tips on how to combine deductions limits for ROTH 401K setting up other retirement deductplans plans in QuickBooks Online.

I'll also add this article in case you need help running your payroll reports to see your employees' current year-to-date data in the future: Run payroll reports in QuickBooks Online Payroll. 

You can always post your reply here if you have any other concerns regarding payroll. Let me know and I'll help you out. 

I am sorry, but these instructions don't match up with my screen. See attached screen shot. The 401k option does not give me a choice for an after-tax contribution. Can you provide any more instructions?

Also I am not sure what "DT" stands for in your title? Roth 401K DT?

Hello, mitaliano.

I understand your confusion. I'm referring to the customer's username(DT), who is joining this thread.

 I can also provide clarification on employer matching.

Only the employee's designated Roth contributions can be allocated to the Roth account. Additionally, IRS guidelines require that matching contributions for a Roth by an employer must be allocated to a pre-tax account. As a result of this, company contributions will need to be set up as separate deductions/contributions. 

Looking at your screenshot, we can simply click on the Add deduction/contribution option to add the Roth 401(k) plan. Here are the complete steps to set it up: 

1. Go to the Payroll menu, then select Employees.
2. Click the employee's name, then click Edit employee.
3. Under Deduction/contribution type and then click Edit. 
4. Click on the Add deduction/contribution.
5. Under Deduction/contribution type, select Retirement plans.
6. Set the type to After-tax Roth 401(k).
7. Add the Employee deduction amount.
8. Click Save.

I'm adding these articles that will guide you with retirement contributions in QuickBooks:

• Retirement plan deductions/contributions.
• Retirement Topics - Catch-Up Contributions.
• Add or edit a deduction or contribution.

We're just one post away if you have other payroll concerns. Don't hesitate to reach out to us again. Keep safe!

Thank you. However, I am told that new rules passed during the last week of December and come into effect Jan 1 2023 as follows: 

"Employers can offer matching contributions to Roth 401(k)s the same way they do with regular 401(k)s. Currently, however, that Roth match has to go into a regular 401(k) account before you pay income taxes on it. The new rule gives employers the option to let employees choose between putting the match in a Roth 401(k) or a regular one. "

For now, I think I figured out a workaround by using the ROTH 401k for the employee deduction and the "Company-only plan" When I add that contribution item it seems to treat the contribution as after tax.

I cannot be the only one wondering about this option. I hope Quickbooks can update these selections to match the new rules.  Thank you.

Hello - When will Quickbook update their options to allow for a employer contribution to the Roth 401k? The rule has changed and this is allowed now so we need Quickbooks to also update. This rule was changed in Jan-2023 and we're in April now still without an update from quickbooks to allow this selection.

I've got you covered, @bigrock.

I recognize you want to enable the option to enter a company contribution Roth 401k in QuickBooks Online Payroll.

A Roth 401(k) is an employer-sponsored retirement savings account funded with post-tax money. Withdrawals in retirement are tax-free.

To enable this option isn't available in QuickBooks Online Payroll. We recommend sending feedback to our developer in this matter.

Here's how:

1. You can go to the Gear icon.
2. Under the Profile column, press the Feedback button.
3. Write your product suggestion, then click Next.

Furthermore, our Product Development team receives your thoughtful comments (QBO) through the feature request tracking QuickBooks Online Feature Requests website.

I'm also including these articles for additional information:

• Retirement plan deductions/contributions.
• Set up a Roth 401(k) plan.
• https://www.irs.gov/pub/irs-pdf/p4530.pdf.

There you go. I'm keen to furnish more knowledge on any payroll-related topic. Please add it in the remark section. May you have a fabulous day.

I appreciate you writing back, but does this really require a feature request? This seems like something basic quickbooks should incorporate without the need for a feature request from a user. Hoping it gets fixed soon.

Yes, you need to submit a request for this feature to be added to QuickBooks Online, @BRECquick.

This feature is still not available in QuickBooks Online. For this to be added, you need to submit a request. Our developer team will decide to add it.

For future reference, here is an article to guide you in running payroll reports: Run reports in QuickBooks Online.

Let me know if you have questions about managing your 401 forms. I'm always here to help. Have a great day.

I would suggest you make sure the client has amended their 401(k) plan to allow for employer contributions to be deposited after tax before doing this. Most plan documents have not been amended to cover for this law change yet so if you start depositing it to the plan, you may create a problem unless the plan has been amended. It isn't an arbitrary option through payroll but a requirement of the 401(k) Plan Document. There has not been any clear guidance yet on whether the client can take the deduction for Roth match since it's being deposited on an after tax basis. Usually when they are pre-tax, the employer can claim the match contribution as a deduction. Before you set this up in payroll, the client should be speaking with their 401(k) administrator to amend their document and their accountant to discuss tax issues. 

The steps you are providing for a Roth 401K doesn't answer everyones question.  When you select after tax for Roth, there is no option to choose Employer Contribution.  Epic fail QBO.  Someone needs to address this ASAP to track Employer Contribution.

@Ethel_A  Why do we- the users- need to suggest the change? You are listed as part of the quickbooks team and YOU obviously know their is an issue that needs to be resolved.  Clearly the Federal rules for Roth has updated so to stay in Federal compliance quickbooks needs to update as well.   Instead of always telling users- they need to suggest edits- that in my experience never happen. AND yes- I sent in an edit before writing you- as I am responding in Nov 2023 and nothing has changed yet.  Seems to make way more sense for quickbooks to just make the update to stay compliant and make payroll function for everyone- just logical.  FYI- this is rhetorical- not wanting an answer or reply- just stating a logical opinion.

I’m not a part of QuickBooks - I am suggesting you wait until the regulators have finalized this. It may be law, but it’s pending final regulations on how to handle the taxation. Does the company get to take a tax deduction - yes, as long as the tax is passed to the employee. Do you have any idea how that is going to be done? How are you reporting it on the W2 if the employee makes this election? Can the 401k record keeper even handle you submitting this type of deduction to them? Has the client amended the plan to allow for this? These are all things that need to happen BEFORE you set up a payroll deduction in QuickBooks. I work in the 401k space and I have yet to find a company that handles retirement plans that is set up to take any deduction you are trying to get QuickBooks to fix. 

It is 7/31/24 and this issue remains. Offering a Roth 401k with company match of some sort is optional at this point for companies. In 2025, offering it is going to be mandatory. 

This article suggests (down in "Hurdle #4" paragraph) that payroll systems need to updated for the new law (allow post-tax company match deductions on Roth 401K and have W2s that reflect this accurately) 

https://www.asppa.org/news/secure-20%E2%80%94so-about-employer-roth-contribution%E2%80%A6 

As of yesterday, QBO support is not aware how to do this. Any new answers from QB? Or workarounds from the community?

Thank you for dropping by, cphug184. I'm here to answer your question.

QuickBooks is compliant with the IRS when it comes to retirement plans. This means that any changes to the 401k retirement plan will be automatically updated within the system. However, as of now, the option to set up a Roth 401k with employer matching isn't an option.

Here at Intuit, we strive to cater to the needs of all QuickBooks users worldwide, ensuring that you receive the best possible experience. While we are dedicated to enhancing your experience, I suggest sending your request directly to our product engineers using the feedback feature. Your input helps us enhance the program's features.

To provide feedback, you can follow the steps below:

1. Go to the Gear icon at the top.
2. Select Feedback.
3. Enter your comments or product suggestions. 
4. Then select Next to submit feedback.

If you are interested in setting up other retirement plan deductions or company contributions in QuickBooks Online Payroll, you can refer to this article for guidance: Set up or change a retirement plan.

Let me know if you have other payroll concerns in QuickBooks, cphug184. We're just around to help.

Has QuickBooks fixed this yet? 

Let me assist you with your payroll forms, @paul14.

It appears that you've posted a similar issue that my colleague has already addressed. Please click this link to view the thread: My employee wants his 401K company match to be a 401K Roth Match. How do I set that up in my payroll...

If you still have more concerns about your payroll forms, please don't hesitate to reply on the thread. Have a great day, and take care.