2 jobs, 2 401(K) plans

Forum|Forum|5 years ago
March 2, 2021
6 replies
19 views

A client, 35 years old had two jobs in 2020 (unrelated employers). Both jobs offer 401(K) plans. He deferred $19,500 at job #1 and $ 4,000 at job #2. Is that legal? Does ProSeries software give an error message about this situation?

ProSeries Professional

This topic has been closed for replies.

Best answer by Just-Lisa-Now-

Level up is a signature line, ignore it.
So yes, he has excess contributions, Im honestly not sure how to deal with this situation though, sorry.

You may want to start a new post asking how to rectify excess 401k contributions through payroll.

qbteachmt

Level 15

The IRS knows:

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits

"Generally, you aggregate all elective deferrals you made to all plans in which you participate to determine if you have exceeded these limits. If a plan participant’s elective deferrals are more than the annual limit, find out how you can correct this plan mistake."

Is the person 50 or older?

"Highlights of changes for 2020

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased from $19,000 to $19,500.

The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500."

Don't yell at us; we're volunteers

D

danthetaxmanAuthor

Level 4

I said he was 35. What is this "Level up" at the end?

Just-Lisa-Now-

Answer

Intuit Community Champion

Level up is a signature line, ignore it.
So yes, he has excess contributions, Im honestly not sure how to deal with this situation though, sorry.

You may want to start a new post asking how to rectify excess 401k contributions through payroll.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

sjrcpa

Level 15

He needs to withdraw the excess, plus earnings, from one of the plans. I think it needs to be done by ~~3/15/21~~. 4/15/21 per qbteach's link.

The excess is taxable as wages in 2020.

The more I know the more I don’t know.

Sign up

Login with SSO

Let's get you signed in

Login with SSO