How is PTO cash out from previous employer into 401K impacts my yearly 401K contribution?

Forum|Forum|4 years ago
October 27, 2021
5 replies
39 views

I used to work for a state agency. I had accrued $9K worth of PTO from 2019 to 2021 September, which I was given an option to put into 401K on termination.

My new employer also offers 401K. My question is, how does PTO cash out into 401K impacts how much I can contribute in my new employer's 401K. Can I still contribute full $19,500 + $9K or is it $19,500 - $9K, or something else? Thanks

TurboTax Online

macuser_22

Alumni - Champ

If reported in box 12 on your 2021 W-2 as it should be if they treated it as salary , then it is part of your contributions and applies to the yearly limit.

Be sure to notify your new employer so that you do not have excess deferrals.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

sdaroraAuthor

Level 3

2021 W2s are not ready that is why i am asking this question here.

macuser_22

Alumni - Champ

@sdarora wrote:

2021 W2s are not ready that is why i am asking this question here.

Ask you prior employer how they will report it. Nobody here knows.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**