Secure 2.0 Calculation of Catchup need consideration for Previous Roth Contributions — Cloud Customer Connect
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Secure 2.0 Calculation of Catchup need consideration for Previous Roth Contributions

Summary:

When determining the Roth Catchup requirement for employees over age 50 + wages over the specified limit, under IRS rules 1.414(v)-2(b)(1), the regulations take into account Roth contributions made at any time during the year (including prior to the time that a participant reaches the 402(g) limit) in determining whether the Roth catch-up requirement is met for the year.

Content (please ensure you mask any confidential information):

We currently have Pre-Tax, Pre-Tax Catchup; Roth, Roth-Catchup element configured. Employees can elect both Pre and Roth contributions. We entered the flag as "Eligible for Pre-Tax Age Catch-Up Contributions = N" as the employee is > 50 earning > $145 in eligible wages in 2024. But how do we determine during the pay period the employee reaches the $23,500 limit, to check if they already contributed $7,500 in Roth Contributions? If they already contributed $7,500 to Roth, the catchup can continue as Pre-Tax until the full $31,000 is reached.

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