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Set up a Roth 401(k) plan

Learn how to set up a Roth 401(k) retirement plan in Online Payroll.

A Roth 401(k) combines features of the traditional 401(k) with those of a Roth IRA. It's offered by employers like a regular 401(k) plan. But like a Roth IRA, contributions are made with after-tax dollars. We'll show you how to set this up.

General information: Roth 401(k) plan

While a participant in a Roth 401(k) plan doesn't get an upfront tax-deduction, their account grows tax-free. Withdrawals taken during retirement aren't subject to income tax. Provided you're at least 59 1/2. And you've held the account for five years or more.

The Roth 401(k) can offer advantages to high-income individuals who haven't been able to contribute to a Roth IRA because of the income restrictions. (Eligibility for 2019 phases out at $137,000 for single filers. And $203,000 for those who are married and file jointly). There are no income stipulations for Roth 401(k) accounts.

In addition Roth 401(k) accounts are subject to the contribution limits of regular 401(k) plans, which is $19,000 in 2019. That allows individuals to save thousands of dollars more in tax-free retirement income than they can through a Roth IRA.

Set up a Roth 401(k)

Set up a Roth 401(k) plan in Intuit Online Payroll and QuickBooks Online Payroll.

  1. Select Employees. (In QuickBooks Online Payroll, select Workers or Payroll menu, then select Employees.)
  2. Select the employee's name.
  3. In the Deductions & Contributions section, select Edit.
  4. In the Deductions for Benefits section, select Add a Deduction.
  5. Select Retirement Plans as the category and After-tax Roth 401(k) as the type.
  6. Enter a description.
  7. Select Ok.

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