How do you change the annual maximum on the 401K deduction from 18,500 to 24,500 (50+ can add 6,000 more into their accounts)

Greetings, @kskinner.

It's nice to see your post in the QuickBooks Community. I'd be happy to guide you through the steps in changing the annual maximum amount for the 401k deduction to $24,500. 

If you're referring to the employees' maximum annual contribution, you need to create a catch-up payroll item for 401k so that QuickBooks will automatically allow a higher contribution limit for employees aged 50 and over.

To begin, let's delete the 401k deduction item so that you can create the 401k catch-up item.

Here's how:

1. On the left pane, select Workers.
2. Select the Employees tab then select the employee's name.
3. Under the employee's name, click the Edit employee button.
4. In section 4, click the Pencil icon. 
5. Click the trash bin icon beside the 401k item.
6. Click Yes to confirm. 

After that, let's set up the 401k catch-up deduction item.

Here's how: 

1. On the left pane, select Workers, then select the Employees tab.
2. Select the employee's name, then click Edit employee under the employee's name.
3. In section 4, click Add a new deduction. 
4. From the Deduction/contribution or garnishment drop-down, select Deduction/contribution.
5. From the Deduction/contribution drop-down, select New deduction/contribution.
6. From the Deduction/contribution type drop-down, select Retirement Plans.
7. From the Type drop-down, select 401(k) Catch-up.
8. Enter a description or the name of the provider for the retirement plan.
9. Select  $ amount or % of gross pay for the Amount per pay period, and then enter the dollar amount or percent of the deduction or contribution per paycheck for this employee.
10. Click OK.

After you set up that item for one employee, you can assign it to other employees. Also, QuickBooks will record the transactions under one deduction item.  

I've also added some articles for future reference: 

• Catch-up retirement plans

• Deferred compensation limits

• IRS Announces 2018 Pension Plan Limitations

For additional help, you can also call our Payroll Support to guide you through the steps. They can initiate a screen sharing session to help you resolve set this up quickly. 

And of course, you're more than welcome to get back in this thread if you have any other questions about changing the annual maximum limit for 401k in QuickBooks Online. I'll be happy to help you further. 

But when I delete the 401k deduction - per the first step - what happens to it?  Will the $18,500 still show up on my reports and the W-2 and then the $6,000 will be added to it?  I hate deleting something that's already happened.  Also, what about all the employees that don't get the catch-up - how do I keep doing their regular 401k deduction for the rest of the year.  I need a safe-guard so the under 50's don't go over the $18,500.  That's why I wanted two separate deductions.

Thanks for getting back, cmacdonald.

I'd like to add some details about changing the annual maximum for 401K.

When you delete the 401K deduction for an employee and create the 401k catch-up item, the $18,500 deduction amount will still show up on your reports.

For those employees that didn't get the catch-up, their 401K deduction will remain the same for the rest of the year. You can check their employee details to make sure they're using the regular 401K deduction item.

Here's how:

1. Go to Workers on the left menu.
2. Choose Employees tab.
3. Select an employee.
4. Click the pencil icon for Pay.
5. Verify the 401K deduction item.
6. Click Done.

I hope this brings clarity to your concern about changing the annual maximum for 401K in QBO. Let me know if you have further questions. I’m here to help.

@kskinner@Charies_M@cmacdonald@MaryGraceS

OMG!!!! Why would they tell you to delete the item?! NO!

ALL you have to do is enter the employee's date of birth in the employee profile (a field often left blank when bookkeepers or owners setup employees).

Once the program "sees" the employee is at the catch up age, it will automatically increase the annual limit.

Hi there, @JT_WA_State.

Thank you for joining us in this thread. 

I've tried updating the birth date for new and existing employee's profile in QuickBooks. However, I got an alert, "You cannot select Regular & Catchup deductions of the same type." alert which is why you need to delete the 401k deduction item. By doing so, QuickBooks will allow you to create the catch-up item.

Also, I would appreciate it if you can share some screenshots of your suggested resolution. 

Thanks for dropping by. I'm just a post away if you have any other questions about setting up the 401k catch-up plan in QuickBooks Online. I'll be happy to help you further. 

I followed the steps and deleted the original 401k deduction and am still recieving the "you cannot select regular & catchup deductions of the same type". Why can I still not change this employee to catch up?

Hi there, @Jmeg.

Thank you for posting in the QuickBooks Community. I'll be happy to help get you to the right support.

Since you've already tried the steps above to create the 401 k catch-up plan, I suggest calling our Payroll Support. They have the tools to help verify this information on our system records and check why you're getting this alert.

 Here's how you can reach them: 

1. Open this link: https://payroll.intuit.com/support/contact/?infosrc=qs&service=64.
2. Look for QuickBooks Online Payroll.

The phone support agents will be able to assist you in getting this resolved.

Feel free to let me know how the call goes. I'll be right here to keep helping.

Follow up after my call: 

After trying various things we discovered that the LTD and AD insurances were set up as a type of 401k (we don't know why) in our QB online account. We changed it to a type of health insurance(closest available option) and QB online would then allow us to add the 401k catch-up. So if it is not allowing you to add the 401k catch-up to an employee make sure that none of the other types of deductions are set as a 401k by going in to your payroll settings. 

My QB is still remembering the old limit of 2021. It is NOT recognizing the fact that I increased the limit for 2022. Please call me at [removed], thanks

[removed]

Hello, 1407.

You'll need to review your account subscription or in the settings and I highly suggest contacting our Support team. They have tools that can pull up your account in a secure environment and check the cause of the issue. They can also perform other troubleshooting steps to fix this for you.

Here's how to reach them:

1. Click the (?) Help icon and enter Talk to a human (then type it again when prompted).
2. When asked by the bot, enter your concern
3. Select I still need a human, then proceed with Contact us or Get help from a human.
4. Choose either Chat or Callback.

On top of that, I've also included this reference helpful with the resources needed so you can keep the security of your account up-to-date: Account management gathers topics for your Intuit Account.

Please let me know how the call goes or if you have any other issues or concerns. I want to make sure everything is taken care of for you. I'll be here to help. Have a good one!

Hello. This has become a topic at my workplace. I did not know I had to add another deduction, so good to know. My question is when I delete/add this catch up deduction, will QB "re-start" the limit amount? I have two employees 60+ that decided to up there contributions after 6 months of payroll. Will QB continue the running total or start at $0? 

Thank you