I am researching this on the IRS site as well, but thought I'd put this out here for any help that someone can give. Is there any amount ($5,000?) that can be contributed additionally to a 401K as a "catch-up" elective deferral? For 50 and over? I think it only applies to plans such as 403(b) and SEP's, SIMPLE's, etc. Anything out there for 401K? And if so, does it have to be done by Dec. 31, 2006, or by the April end filing date in 2007? Thanks in advance.
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401k Catchup
Look at TTB 13-2.
There is a catchup provision of $5000 for age 50 or older.
Could not find clear definition of last date allowed but I am resonably certain that on 401 (k) plans it is December 31.
Someone else will need to clarify dates. -
Haven't received my TTB yet
Thanks for the reply. Unfortunately I haven't received my book yet. I was emailed that it was on it's way. Counting the minutes!!
I found on IRS site that a plan participant who is over 50 by end of calendar year can make catch up contributions, but they cannot exceed the smaller of:
$5000, or
The excess of the participant's compensation over the elective deferalls that are not catch up contributions.
But also found for '06, the overall limits on deferrals should not exceed more than a total of $15,000 to 401K.
I am mixing myself up here. I've got Christmas junk on my brain. Can anyone clarify?Comment
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The $5,000 age 50 or older catch up contribution is in addition to the $15,000. So for 2006, someone age 50 or older can defer up to $20,000.
Elective deferrals come from W-2 wages for an employee. So an employee would have to elect to defer the money from current year earnings to count as a contribution in the current year.Comment
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