SECURE2.0 Roth IRA

Good evening, @tracemetals.

How are you doing today? I hope all is well. 

I appreciate you reaching out about setting up SECURE 2.0 Roth SIMPLE IRA contributions in QuickBooks Desktop. Right now, this specific feature isn’t built into QuickBooks yet. 

Some of our users still track it by creating a manual after-tax deduction, but the tax reporting side would need to be handled outside of QuickBooks. If you're interested in this process, here's how you can set it up: 

1. Navigating to Lists, then Payroll Item List.
2. Choose Payroll Item, New, then Custom Setup.
3. Click on Deduction, then Next.
4. Naming the deduction (e.g., "Roth SIMPLE IRA (Manual)").
5. Link to the appropriate liability account.
6. Set Tax Tracking Type to None for after-tax deductions.
7. Complete the setup and assign the deduction to the employee profile.

For more information, check out Set up, change, or delete employee paid payroll deductions.

Please let me know if you have any additional questions or concerns. Take care!

How does this show up on their W2? Does it meet the tax guidelines?

ROTH IRA contributions can be found under box 12 in the W2 form, tracemetals.

Yes, Roth IRA contributions meet tax guidelines as they comply with SECURE 2.0 provisions. However, deductions like retirement can decrease the amounts in one or more of the boxes, which means they are subject to Federal Withholding, Social Security, and Medicare taxes.

If you need further questions, feel free to click the Reply button.

How do I set that up to know which is which? If they contribute then it will not be taxed, but if they move the employer contribution from our 401k to the Roth it will need to be taxed. How is that set up?

Roth SIMPLE IRA contribution introduced by the SECURE Act 2.0 is currently unsupported in QuickBooks Desktop Payroll, Trace. 
 

Given this limitation, I recommend consulting a tax accountant for guidance on setting this up and managing these contributions to ensure compliance with the IRS.

For more details on the supported retirement plans, refer to this article: Set up or change a retirement plan.

Feel free to revisit this thread if you have additional questions.

This is part of the SECURE 2.0 Act which is why we need the update to our payroll. When is that coming? You guys have had years to prepare for this!

I wonder if anyone had left QuickBooks Payroll over this...