Not able to add catch up contribution : Here is the error "you cannot select Regular & Catchup deductions of the same type".

Let me share the steps to add your catch-up contribution and resolve the error message you've gotten, @mjoycthomas.

When setting up a retirement plan for your employees in QuickBooks, you can only choose one deduction for your 401k contribution. If you've already set up a 401k contribution, this may be the reason why you're receiving an error message when attempting to add the catch-up contribution.

That said, you'll need to delete the other contribution that you've already set up. Let me guide you on how:

1. Go to the Payroll tab and select Employees.
2. Select the employee's name.
3. From the Deductions & Contributions section, click Edit. 
4. Choose the deduction you want to remove by clicking the Trash bin icon.

Once done, you may want to add a new 401k Catch-up retirement plan. See the steps below:

1. Go to the Payroll tab and select Employees.
2. Select the employee's name.
3. From the Deductions & Contributions section, click Edit. 
4. Click the + Add deduction/contribution.
5. In the Deduction/contribution dropdown arrow, select the + Add deduction/contribution.
6. Choose Retirement plans in the Deduction/contribution type.
7. On the Type dropdown, choose 401 (k) Catch-up.

For more details about setting up deductions in QuickBooks, see this article: Set up a retirement plan.

Moreover, I'll include these links about the yearly retirement plan contribution limits and managing payroll reports:

• Retirement Topics - Catch-Up Contributions
• Run payroll reports

Please know that you're always welcome to comment below if you have other concerns or follow-up inquiries about managing your contributions in QBO. I'm just around to help. Take care always.

I am receiving the same error message. I need to a one time contribution for both 401k contribution ($22500) and 401k catch-up ($7500) for a total of $30,000. How do I reflect both contributions if I can only have one deduction? Thanks in advance

I am also reading other posts that QB is only allowing maximum of $22,500 not $30,000. In looking at 401k deduction the greyed out maximum box states $22,500. In looking at the 401k catch-up the greyed out maximum box states $30,000. But again, I am unable to add both deductions to my employee that we are doing a one time bonus check to cover the full $30,000. 

Hello there, @ccarrllc.

Let me share information on setting up your 401(k) catch up contribution on your employee here in QuickBooks Online (QBO).

You can only choose one deduction from your 401(k) contribution to set up a retirement plan for your employees in QuickBooks. This may be the reason why you receive an error message if you are trying to add a catchup contribution when you set up your 401(k) account.

In order to create a catch up distribution plan, the regular retirement item must be deleted from your employee's. This does not delete the year-to-date amount of the item payroll. It will remove the deducted item, then apply the balance to the new catchup distribution plan.

Let me guide you on how:

1. Choose the Payroll on the left panel.
2. Select Employees, then choose which employee.
3. At the Deductions & Contributions table, click Edit.
4. Click the Trash bin icon on the 401(k) deduction you want to remove.
   
   

Once you’re done, you can now add the 401(k) Catch-up retirement plan. Given that you’re still on your Deduction & Contribution page of your specific employee, you can follow the steps below:

1. Click the + Add deduction/contribution.
2. Select the + Add deduction/contribution in the Deduction/contribution dropdown arrow.
3. In the Deduction/contribution type, pick Retirement plans.
4. Choose 401 (k) Catch-up in the Type dropdown.
5. Type in the necessary details, then click Save.

You can check this article for further information regarding the steps that I have mentioned above: Set up or change a retirement plan.

Moreover, I’ll be leaving you this articles that tackles on creating, managing, assigning or updating your employee’s pay schedules in QBO: Set up and manage payroll schedules.

Let me know if you have other inquiries with setting up the deductions and contributions with your employees here on QBO. I’m just a post away.

If I am understanding correctly, I cannot do one bonus check to cover the full $30k. I need to complete 2 bonus checks. Which one do I do first to avoid being maxed at $30k as some other people have posted. 

Hello, @ccarrllc.

I would like to offer some suggestions on how we can resolve the problem of being unable to process the bonus check.

It would be best to seek advice from a professional accountant or tax expert who can provide personalized guidance based on your unique financial circumstances and the specific terms of your bonus arrangement. They can help you understand the tax implications of your bonus and ensure that you are taking full advantage of any available tax benefits. 

If you're looking for an accountant to handle your financial needs, you can always refer to this article: Find a QuickBooks ProAdviser- Intuit.

In case you need help with running, printing, or customizing payroll reports in QuickBooks Online Payroll, you can always refer to this article: Run payroll reports.

You can always reach out to us if you have any questions about your bonuses. Our Community is always open to addressing your concerns. Take care!

HI, I'm still confused.  My client's financial advisor told me to add two sub-types to the Retirement Plans type - one for 401(k) and one for 401(k) Catch-up.  They then said to take a flat monthly (pay period) amount for the 401(k) of $2,090.90 and a flat catch-up amount of $681.81.  Based on what I am reading above, it doesn't look like I can do that.  If that's the case, how do I deduct the monthly catch up amount?

Thanks for joining in this thread, @Beach05.

Currently, you can only choose one deduction of the same type in QuickBooks Online (QBO). However, you can set up a regular 401(k) retirement plan first. When it reaches the annual maximum amount of $23,000, you can delete the regular 401(k) and create the 401(k) Catch-up. 

Here's how:

1. Go to Payroll and select Employees.
2. Click the employee's name and select Edit in the Deductions & Contributions section.
3. Click + Add deduction/contribution.
4. In the Deduction/contribution dropdown arrow, select the + Add deduction/contribution.
5. Choose Retirement plans in the Deduction/contribution type.
6. On the Type dropdown, choose 401 (k) Catch-up.
7. Fill in other necessary fields, then Save.

To delete the regular 401(k) plan, click the trash bin icon and select Delete to confirm. You can then follow the same procedure mentioned above to set up the 401(k) Catch-up retirement plan.

Furthermore, you can run payroll reports in QBO to view your payroll totals, including your employees' deductions and contributions.

Let me know if you need further assistance setting up 401(k) retirement plans for your employees. I am always available in the Community to help. Take care.

Why am I getting the error "The deduction amount ($30,500.00) can't be greater than the max annual limit ($30,000.00) set for the deduction (401K catchup)" when the deduction limit in the employee is set to $30,500 and grayed out?......the system is still telling me it is limited to $30,000 why doesn't QB fix this?

I'm here to assist and explain the deduction in QuickBooks Online (QBO), @pixidoc.

The error you're encountering is due to QuickBooks Online (QBO) enforcing the annual contribution limit set by the IRS for 401K plans. For 2021, the contribution limit for employees aged 50 and older, which includes the catch-up contribution, is $26,000. However, the regular limit for employees under 50 is $19,500.

In your case, it seems there is a mismatch between the set limit within the employee settings on QBO ($30,500) and the actual IRS maximum allowed limit. Since QBO adheres to federal guidelines, it overrides your manually set limit with the allowed maximum amount. This mismatch may originate from updates in contribution limits that were not reflected in your QBO settings if these were manually adjusted in the past.

To resolve this, you'll need to contact QuickBooks support to adjust the grayed-out setting to the correct IRS limit. Alternatively, if you have access to admin settings where such limits can be adjusted, you should update it to align with current federal limits. For the most accurate and current information, always refer to the IRS guidelines on contribution limits for retirement plans.

Here's how to reach them:

1. Click the Help menu in the upper-right-hand corner.
2. Type in Talk to a human, then press Enter.
3. Select Contact Support Team.
4. Type again Talk to a human and click Contact Support Team.
5. Choose a way to connect with us.

Feel free to continue posting questions in the Community if you have any questions or need further assistance with your payroll in QBO or performing any bookkeeping tasks in the program. The QuickBooks team and other users are always here to help and provide guidance.