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Community Contributor *

Roth 401K Deduction

We recently began offering a 401K program and one of our employees is doing a Roth 401K. The only options on any of the predetermined retirement plans are Gross Pay % or $ Amount. There needs to be an option for Post Tax % since Roth 401Ks are all on post tax dollars. Is this a glitch in the system or is there a work around? It is worrying me that some of my garnishments for some of my employees are also being withheld on Pre Tax Dollars and that is incorrect.
Solved
Best answer 07-18-2019

Accepted Solutions
Moderator

Re: Roth 401K Deduction

Hi, Trevor Brand.

Thanks for getting back to us. Let me help point you in the right direction regarding Roth 401K deduction via QuickBooks Online.

 

Yes, you're right. The Roth 401K is funded with after-tax or post-tax dollars up to the plan's contribution limit.

 

Since you've already go through your setup and still deducting the 401K as a regular pre-tax, I'd suggest reaching out to our QuickBooks Online Support. Agents have the necessary tools to check what's going on and have this investigated.

 

  1. Sign into your QuickBooks Online Company.
  2. Click (?) Help at the upper right corner.
  3. Select Contact US on the pop-up.
  4. Enter a brief description of your concern then hit Continue.
  5. Click Get a callback.
  6. Enter your contact information.
  7. Select Call me.

The following articles are good references:

 

Also, you can visit our The Absolute Beginner’s Guide to Payroll to receive payroll updates.

 

Should you have additional questions about payroll deductions in QuickBooks, please let me know. I'll be around to help.

4 Comments
QuickBooks Team

Re: Roth 401K Deduction

Hello there, @Trevor Brand.

 

I'd be glad to help share additional information about the Roth 401(k) plan.

 

Yes, Roth 401K deduction is made with after-tax dollars. This allow individuals (employees) to save thousands of dollars more in tax-free retirement income. You'll just have to set this up properly in your QuickBooks Online Payroll for the deduction to withheld accordingly.

 

Here's how:

 

  1. Click on Workers at the left pane.
  2. From the Employees tab, click the employee's name.
  3. Click on the pencil icon next to Pay.
  4. Under Does (Employee name) have any deductions? (Examples: retirement, health care), click the pencil icon.
  5. Choose Deduction/contribution from the Deduction/contribution or garnishment drop-down list.
  6. Select New deduction/contribution from the Deduction/contribution drop-down menu.
  7. Select Retirement Plans from the Deduction/contribution type.
  8. Scroll down and choose After-tax Roth 401K.
  9. Enter the Provider, and the Employee deduction.
  10. Click OK.

You may check this article for additional reference: Set up a Roth 401(k) plan.

 

You can also read our help-articles for you reference in the future: Help articles for QuickBooks Online.

 

I'll always be here to help you if you have any other questions about the Roth 401K plan, just add a comment below. Have a great day ahead!

Community Contributor *

Re: Roth 401K Deduction


@Angelyn_T wrote:

Hello there, @Trevor Brand.

 

I'd be glad to help share additional information about the Roth 401(k) plan.

 

Yes, Roth 401K deduction is made with after-tax dollars. This allow individuals (employees) to save thousands of dollars more in tax-free retirement income. You'll just have to set this up properly in your QuickBooks Online Payroll for the deduction to withheld accordingly.

 

Here's how:

 

  1. Click on Workers at the left pane.
  2. From the Employees tab, click the employee's name.
  3. Click on the pencil icon next to Pay.
  4. Under Does (Employee name) have any deductions? (Examples: retirement, health care), click the pencil icon.
  5. Choose Deduction/contribution from the Deduction/contribution or garnishment drop-down list.
  6. Select New deduction/contribution from the Deduction/contribution drop-down menu.
  7. Select Retirement Plans from the Deduction/contribution type.
  8. Scroll down and choose After-tax Roth 401K.
  9. Enter the Provider, and the Employee deduction.
  10. Click OK.

You may check this article for additional reference: Set up a Roth 401(k) plan.

 

You can also read our help-articles for you reference in the future: Help articles for QuickBooks Online.

 

I'll always be here to help you if you have any other questions about the Roth 401K plan, just add a comment below. Have a great day ahead!


Thank you for the prompt reply but unfortunately that is what I have been doing. But when I do so, it only gives me the Gross Pay % and $ Amount options. Now I tested it to see if this would still do after tax but it withholds the same amount as a regular 401K pre-tax so something is wrong there.
Community Contributor *

Re: Roth 401K Deduction


@Angelyn_T wrote:

Hello there, @Trevor Brand.

 

I'd be glad to help share additional information about the Roth 401(k) plan.

 

Yes, Roth 401K deduction is made with after-tax dollars. This allow individuals (employees) to save thousands of dollars more in tax-free retirement income. You'll just have to set this up properly in your QuickBooks Online Payroll for the deduction to withheld accordingly.

 

Here's how:

 

  1. Click on Workers at the left pane.
  2. From the Employees tab, click the employee's name.
  3. Click on the pencil icon next to Pay.
  4. Under Does (Employee name) have any deductions? (Examples: retirement, health care), click the pencil icon.
  5. Choose Deduction/contribution from the Deduction/contribution or garnishment drop-down list.
  6. Select New deduction/contribution from the Deduction/contribution drop-down menu.
  7. Select Retirement Plans from the Deduction/contribution type.
  8. Scroll down and choose After-tax Roth 401K.
  9. Enter the Provider, and the Employee deduction.
  10. Click OK.

You may check this article for additional reference: Set up a Roth 401(k) plan.

 

You can also read our help-articles for you reference in the future: Help articles for QuickBooks Online.

 

I'll always be here to help you if you have any other questions about the Roth 401K plan, just add a comment below. Have a great day ahead!


Thank you for the prompt reply but unfortunately that is what I have been doing. But when I do so, it only gives me the Gross Pay % and $ Amount options to choose from. Now I tested it to see if this would still do after tax but it withholds the same amount as a regular 401K pre-tax so something is wrong there.
Moderator

Re: Roth 401K Deduction

Hi, Trevor Brand.

Thanks for getting back to us. Let me help point you in the right direction regarding Roth 401K deduction via QuickBooks Online.

 

Yes, you're right. The Roth 401K is funded with after-tax or post-tax dollars up to the plan's contribution limit.

 

Since you've already go through your setup and still deducting the 401K as a regular pre-tax, I'd suggest reaching out to our QuickBooks Online Support. Agents have the necessary tools to check what's going on and have this investigated.

 

  1. Sign into your QuickBooks Online Company.
  2. Click (?) Help at the upper right corner.
  3. Select Contact US on the pop-up.
  4. Enter a brief description of your concern then hit Continue.
  5. Click Get a callback.
  6. Enter your contact information.
  7. Select Call me.

The following articles are good references:

 

Also, you can visit our The Absolute Beginner’s Guide to Payroll to receive payroll updates.

 

Should you have additional questions about payroll deductions in QuickBooks, please let me know. I'll be around to help.

Need to get in touch?

Contact us