Hi all!
I know that the IRS allows us to contribute a max of $19,500 in our 401k account for the tax year 2021 but I had a quick question. Does the IRS calculate this "$19,500 cap" based on PAYCHECK date? Or is it based on the date that the money hits your 401k account?
For example, I received a paycheck on 12/31/2020. However, the contribution didn't actually "hit" my 401k account until 1/4/2021. So does that mean that this contribution counts as a 2020 contribution? Or does it count towards the 2021 contribution? (I've attached a screenshot as well)
I'm just wanting to get a clear answer as to whether or not the IRS counts a contribution based on PAYCHECK date or the date in which the money actually shows up in the 401k trustee /administrator's side. However, if it's based on paycheck date.... wouldn't you think it's kind of odd, since the IRS doesn't view individual paychecks from each company? I mean presumably they don't really care if the company issues 26 vs. 24 paychecks per year or any other company-specific information, right?
Any and all help would be greatly appreciated! Thank you! 🙂
You'll need to sign in or create an account to connect with an expert.
Usually the date that the plan posts it according to the terms of the plan. Ask the plan administrator. Also "plan" years do not have to be calendar years - again as defined by the terms of that particular plan.
Normally your 401K contributions are reported in Box 12 of your W-2 with letter code D. Thus, if your contribution was credited to 2020, it would have appeared on your 2020 W-2.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
Sachin Kunagalli
New Member
erikaeriga
New Member
zzz8881
New Member
bhJogdt
Level 2
bethfly
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.