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GBuyalos
December 22, 2022
Question

Simple IRA catch up contributions - Quickbooks Desktop Payroll

  • December 22, 2022
  • 1 reply
  • 0 views

We use Quickbooks Desktop Payroll. We have a Simple IRA, and we have a payroll item for the employee deduction. The contribution limit is set in that payroll item, and we update it annually. We have a couple of employees in the 50+ age bracket, who want to take advantage of catch-up contributions to contribute more than the annual maximum for those under 50.

 

To accommodate this, I assume we need to have an additional payroll item for the catch-up contributions. Is that correct? Do we set the maximum in that new payroll item to the combined total for regular + catch-up contributions and use that new payroll item all year for the folks in the 50+ group? Or is there a better way to handle this?

1 reply

Rose-A
Rose-A
December 23, 2022

Good day, GBuyalos.

 

We must create a new payroll item with the total of regular and catch-up contributions and use that item to accommodate your 50+ groups in QuickBooks Desktop.

 

Below are the steps to complete the process:
 

  1. Click Lists at the top menu bar, then Payroll Item List.
  2. Select Payroll Item ▼ dropdown, then New.
  3. Tap Custom Setup, then Next.
  4. Select Deduction or Company Contribution, then Next. Enter the name of the deduction or company matching item, then select Next.
  5. Select the name of your retirement plan provider, or add it, and enter the account number. In the Liability account field, select the account that tracks the deduction or contribution to be paid. Select Next.
    • For company match items, in the Expense account field, select the account that you want to track the item. Select Next.
  6. In the Tax Tracking Type window, select the applicable retirement plan. Select Next twice.
  7. Under Calculate based on quantity, select Neither and select Next.
  8. Leave Default Rate and Limit fields blank. You can add the rate and limit when you add the item to the employee profile
  9. Hit Finish.

 

If you need assistance assigning this item to your employee's profile, please see this article for detailed instructions: Set up a retirement plan. Details on how to ensure the items are reflected on their paychecks can be found at the same link.


If you have any further concerns or questions about setting up your Simple IRA deductions, please leave a comment below. I'm always happy to assist in any way I can.

G
GBuyalosAuthor
December 28, 2022

If I don't put a dollar limit in on the payroll item code, and just put the limit in for each employee, do I need to have two separate payroll items (one for under 50 and one for 50+)?

Nicole_N
Nicole_N
December 28, 2022

Hi, @GBuyalos. Thanks for getting back here.

 

Yes, that is possible if you want the employees under 50 and 50+ to be separated in the reports.  But you can also use the same item for the simple IRA and you'll just need to add the catch-up plan item for the 50+ employees. 

 

You can also see this article if you want to learn about the yearly retirement plan contribution limits. 

 

Let me know if you have any other questions about payroll items. I'm always around to help. Stay safe and have a good one!

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