Simple IRA catch up contributions - Quickbooks Desktop Payroll

Good day, GBuyalos.

We must create a new payroll item with the total of regular and catch-up contributions and use that item to accommodate your 50+ groups in QuickBooks Desktop.

Below are the steps to complete the process:
 

1. Click Lists at the top menu bar, then Payroll Item List.
2. Select Payroll Item ▼ dropdown, then New.
3. Tap Custom Setup, then Next.
4. Select Deduction or Company Contribution, then Next. Enter the name of the deduction or company matching item, then select Next.
5. 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.
6. In the Tax Tracking Type window, select the applicable retirement plan. Select Next twice.
7. Under Calculate based on quantity, select Neither and select Next.
8. Leave Default Rate and Limit fields blank. You can add the rate and limit when you add the item to the employee profile
9. Hit Finish.

If you need assistance assigning this item to your employee's profile, please see this article for detailed instructions: Set up a retirement plan. Details on how to ensure the items are reflected on their paychecks can be found at the same link.

If you have any further concerns or questions about setting up your Simple IRA deductions, please leave a comment below. I'm always happy to assist in any way I can.

If I don't put a dollar limit in on the payroll item code, and just put the limit in for each employee, do I need to have two separate payroll items (one for under 50 and one for 50+)?

Hi, @GBuyalos. Thanks for getting back here.

Yes, that is possible if you want the employees under 50 and 50+ to be separated in the reports.  But you can also use the same item for the simple IRA and you'll just need to add the catch-up plan item for the 50+ employees. 

You can also see this article if you want to learn about the yearly retirement plan contribution limits. 

Let me know if you have any other questions about payroll items. I'm always around to help. Stay safe and have a good one!

Hm, I'm not sure I understand your reply.

Can I have just ONE payroll item for "Simple IRA Employee Contributions" and set the correct limit on each employee depending on their age? I would leave the limit blank on the payroll item itself.

Are there reasons I may or may not want to do that, versus setting up two separate payroll items?

Thanks!

Hi there, @GBuyalos.

You can use separate payroll items for Simple IRA contributions for employees below and above the age of 50 to have an easy way of reading your reports in the future. However, you'll still be asked to create the payroll item for the catch-up contributions to accommodate your employees' ages above 50.

Yes, you are asked to create one payroll item only leaving the default rate and limit fields blank to ensure that contributions are tracked accordingly once you assign the payroll items to your employees' profiles.

Kindly read and use this article to learn more about the payroll items of deductions and contributions: How to set up a retirement plan deduction or a company contribution in QuickBooks to track and tax i...

Let me know in the comments below if you have any other questions. Take care!