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D
DT1628
January 12, 2023
Question

Has anyone setup a 401K ROTH w/employer matching. I am really struggling with this. Have been told it needs to be set-up as a Traditional 401K but I'm not confident that the tax portion will be correct!

  • January 12, 2023
  • 3 replies
  • 0 views

Has anyone set-up Payroll with 401K ROTH w/employer matching.  I was told to pick a Traditional 401K but I'm concerned that the taxes will not be done correctly.

    3 replies

    M
    mitaliano
    January 13, 2023

    I am struggling as well. I need to set up a 401k ROTh the both the employee and employer contributions made after taxes. The traditional 401k makes the contribution before taxes. Any help would be appreciated. This is a new contribution option as of 12/28/2022 but goes into effect Jan 1 2023

      T
      TirzahC
      January 13, 2023

      I can provide you with the step-by-step process for setting up an employer match for Roth 401K, DT. 

       

      You can follow these steps:

       

      1. Go to the Payroll menu and then select Employees.
      2. Select the employee's name and then click the Pencil icon in the Pay section.
      3. Scroll down on the deductions section and then click +Add deductions.
      4. Click the + Add deduction/contribution and then select Retirement Plans under Deduction/Contribution type. Then select 401(k).
      5. Enter the name of the provider and nd the amounts per pay period.
      6. Tap Save.

       

      You can take a look at this article: Retirement plan deductions/contributions. This will provide you tips on how to combine deductions limits for ROTH 401K setting up other retirement deductplans plans in QuickBooks Online.

       

      I'll also add this article in case you need help running your payroll reports to see your employees' current year-to-date data in the future: Run payroll reports in QuickBooks Online Payroll. 


      You can always post your reply here if you have any other concerns regarding payroll. Let me know and I'll help you out. 

      M
      mitaliano
      January 13, 2023

      I am sorry, but these instructions don't match up with my screen. See attached screen shot. The 401k option does not give me a choice for an after-tax contribution. Can you provide any more instructions?

      T
      TirzahC
      January 13, 2023

      Hello, mitaliano.

       

      I understand your confusion. I'm referring to the customer's username(DT), who is joining this thread.


       I can also provide clarification on employer matching.

       

      Only the employee's designated Roth contributions can be allocated to the Roth account. Additionally, IRS guidelines require that matching contributions for a Roth by an employer must be allocated to a pre-tax account. As a result of this, company contributions will need to be set up as separate deductions/contributions. 

       

      Looking at your screenshot, we can simply click on the Add deduction/contribution option to add the Roth 401(k) plan. Here are the complete steps to set it up: 

       

      1. Go to the Payroll menu, then select Employees.
      2. Click the employee's name, then click Edit employee.
      3. Under Deduction/contribution type and then click Edit. 
      4. Click on the Add deduction/contribution.
      5. Under Deduction/contribution type, select Retirement plans.
      6. Set the type to After-tax Roth 401(k).
      7. Add the Employee deduction amount.
      8. Click Save.

       

      I'm adding these articles that will guide you with retirement contributions in QuickBooks:

       

       

      We're just one post away if you have other payroll concerns. Don't hesitate to reach out to us again. Keep safe!

      C
      cphug184
      July 31, 2024

      It is 7/31/24 and this issue remains. Offering a Roth 401k with company match of some sort is optional at this point for companies. In 2025, offering it is going to be mandatory. 

       

      This article suggests (down in "Hurdle #4" paragraph) that payroll systems need to updated for the new law (allow post-tax company match deductions on Roth 401K and have W2s that reflect this accurately) 

      https://www.asppa.org/news/secure-20%E2%80%94so-about-employer-roth-contribution%E2%80%A6 

       

      As of yesterday, QBO support is not aware how to do this. Any new answers from QB? Or workarounds from the community?

        M
        MirriamM
        July 31, 2024

        Thank you for dropping by, cphug184. I'm here to answer your question.

         

        QuickBooks is compliant with the IRS when it comes to retirement plans. This means that any changes to the 401k retirement plan will be automatically updated within the system. However, as of now, the option to set up a Roth 401k with employer matching isn't an option.

         

        Here at Intuit, we strive to cater to the needs of all QuickBooks users worldwide, ensuring that you receive the best possible experience. While we are dedicated to enhancing your experience, I suggest sending your request directly to our product engineers using the feedback feature. Your input helps us enhance the program's features.

         

        To provide feedback, you can follow the steps below:

         

        1. Go to the Gear icon at the top.
        2. Select Feedback.
        3. Enter your comments or product suggestions. 
        4. Then select Next to submit feedback.

         

        If you are interested in setting up other retirement plan deductions or company contributions in QuickBooks Online Payroll, you can refer to this article for guidance: Set up or change a retirement plan.

         

        Let me know if you have other payroll concerns in QuickBooks, cphug184. We're just around to help.

        M
        MAG MN
        November 24, 2024

        Has QuickBooks fixed this yet? 

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