For 2024, SIMPLE IRA employee (and self-employed) contribution limit was increased from $16000 to $17,600 by Secure Act 2.0 for businesses with 25 or less employees. The catchup contribution was also increased from $3500 to $ 3850. This permits a total contribution of $21450. But Turbotax flags any contribution more than $19500 as an error, and reduces the deduction. I have updated my software daily but this continues to be an issue. Please look at IRS Publication IR-2024-285, Nov. 1, 2024 (https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000)which points out:
- The amount individuals can generally contribute to their SIMPLE retirement accounts is increased to $16,500, up from $16,000. Pursuant to a change made in SECURE 2.0, individuals can contribute a higher amount to certain applicable SIMPLE retirement accounts. For 2025, this higher amount remains $17,600.
- The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most SIMPLE plans remains $3,500 for 2025. Under a change made in SECURE 2.0, a different catch-up limit applies for employees aged 50 and over who participate in certain applicable SIMPLE plans. For 2025, this limit remains $3,850. Please note the IRS uses the verb "remains" $17,600 and $3,850 when referring to the caps for 2025. The use of "remains" makes it clear that the limits were the same in 2024 permitting a total contribution of $21,450.
