Catch Up 401(k) & Section 415(c)(1)(A)
Can you add the catch up amount of $6,000 to the defined contribution plan amount of $54,000 for a total of $60,000 under section 415(c)(1)(A)?
Can you add the catch up amount of $6,000 to the defined contribution plan amount of $54,000 for a total of $60,000 under section 415(c)(1)(A)?
Permalink Submitted by Ben Meyer on Wed, 2017-02-22 17:55
Yes. The catch-up contribution does not count toward the “additions” limit of section 415(c)(1)(A). But be sure to watch the deductions, as there are known cases of large employers who have not had their payroll systems setup correctly, They incorrectly included the catch-up and discontinued making deductions when the limit was reached with the inclusion of the catch-up. It was corrected but only after some long discussions.
Permalink Submitted by Marina Ferrone on Wed, 2017-02-22 19:26
Thank you for clarifying that.