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Product support for the Creative Solutions Accounting platform ended on September 30, 2020.
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To set up an employee's 401(k) deduction to continue on a taxable basis after the pre-tax deduction reaches its annual limit, follow these steps.
Creating the 401(k) after-tax deduction item
- Choose Setup > System Configuration > Deduction Items.
- In the Deduction Items dialog, highlight the 401(k) % of Gross deduction item, press the F3 key on your keyboard, and then choose Copy Deduction Item from the menu.
- Enter a description and report description for the new deduction item, modifying information on each tab as necessary, including the information on the Tax Treatment tab to make the item taxable.
- Click the Calculations tab, mark the Use after the annual limit reached for checkbox, and then choose the corresponding 401(k) pre-tax deduction item.
Note: Once the original pre-tax deduction item reaches the global or deduction item limit, it will stop calculating and the new after-tax deduction will begin to calculate instead.
- Click Enter to save the deduction item.
Adding the 401(k) after-tax deduction item to the employee record
- Choose Setup > Employees, highlight the appropriate employee in the list, and click the Edit button.
- Click the Tax Withholdings and Deductions tab.
- Click inside the first empty field in the Tax Withholdings and Deductions grid and select the 401(k) %/Gross Cont. or 401(k) Fixed Cont. deduction item from the drop-down list.
- Click the Item Properties button and enter the appropriate amount or percent of the deduction, modifying information on each tab as necessary.
- Click OK to save the information and close the Item Properties dialog.
- Click Enter to save the information for this employee.
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