Customizing settings for employee retirement catch-up contributions and limits

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Accounting CS handles cafeteria plan deductions, retirement plan deductions, and company matching amounts and automatically adjusts the annual limits for the various retirement plans.

When employees reach age 50, they are eligible to make increased (catch-up) contributions, and so as long as a birth date has been entered for an employee in the Birth date field in the Personal tab in the Setup > Employees screen before payroll checks have been processed, the application will automatically increase their annual contribution limit.

You have a number of ways to specify how these limits are applied for your clients and their employees.

Excluding deduction items or employees from catch-up limit provisions

Some plans do not offer catch-up limits and some employees choose not to take advantage of catch-up limits or the opportunity to make additional contributions past the normal annual limit. The application provides a couple of ways to specify that increased catch-up limits should not apply for an employee regardless of their age.

At the client level, you can specify that the catch-up limit should not be applied to a specific deduction item for any employees by marking the Do not apply catch-up limit checkbox in the Limits section of the Main tab of the Setup > Payroll Items screen. The checkbox is available only for deduction item using a Special Type of Retirement/Cafeteria plan with 401(k), Roth 401(k), 403(b), Roth 403(b), 457 or Simple 408(p) selected.

At the employee level, you can specify that the catch-up limit should not be applied to a deduction item for a single employee by marking the Do not apply catch-up limit checkbox in the Limits section of the Main tab of the Employee Payroll Item Settings dialog (accessed by clicking the Ellipsis button next to the deduction item in the Deductions grid of the Payroll Items tab of the Setup > Employees screen). Marking and clearing the checkbox here at the employee level will override the client-level selection for this employee.

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