Learn about the yearly retirement plan contribution limits.
A contribution to a retirement plan can be either an after-tax or a deferred compensation. And the tax law placed a limit on how much an employee and employer can contribute in a year.
QuickBooks automatically adds these limits on your payroll product.
Employee contribution limits
|Plan Type||Exempt From ****||Limit <50 Years||Limit >50 Years||W-2 Box Code|
|401(k)||FIT & SIT||$20,500||$27,000||Box 12 - D|
|After-tax Roth 401(k)||Nothing - Fully Taxable||$20,500***||$27,000***||Box 12 - AA|
|Simple IRA||FIT & SIT||$14, 000||$17,000||Box 12 - S|
|403(b)/ TSA||FIT & SIT||$20,500||$27,000*||Box 12 - E|
|After-tax Roth 403(b)||Nothing - Fully Taxable||$20,500***||$27,000*||Box 12 - BB|
|408(k)(6) / SEP IRA||FIT & SIT||$20,500||$27,000||Box 12 - F|
|457(b)||FIT & SIT||$20,500||$27,000**||Box 12 - G|
|Roth 457(b)||Nothing - Fully Taxable||$20,500***||$27,000**||Box 12 - EE|
* There is a special catch-up election for employees who have completed at least 15 years of service with a qualified organization. Such employees are able to contribute an additional $3,000 annually, which brings the limit to $22,000 (<50) or $28,000.00. (>50). See Retirement Plans FAQs regarding 403(b) Tax-Sheltered Annuity Plans for additional details.
** Special rules may apply depending on the type of entity and how close the employee is to retirement.
*** IRS rules indicate a Roth 401(k) shares the annual limit with a 401(k) plan. A Roth 403(b) shares the annual limit with a 403(b).
See COLA Increases for Dollar Limitation on Benefits and Contribution for more info.
Company contribution limits
For company contribution limits, refer to IRS Retirement Topics - Contribution Limits or your plan sponsor.
Excess deferral or over-contributing
There are consequences from over-contributing to retirement plans. For more info about excess deferral, visit the IRS website.
- QuickBooks Desktop Payroll: Set up Roth 401(k), Roth 403(b) plans, and Roth 457(b) plans
- QucikBooks Desktop Payroll: Set up a payroll item for retirement benefits 401(k), Simple IRA, etc.)
- Online Payroll: Retirement plan deductions/contributions.
For additional info on Employee Limits and Employer (Company) contributions or matches see the IRS resource: