My employer allows both an age 50 and 15 year catch-up contribution to my 403(b) retirement plan. How can I get TurboTax to account for the $3,000 15-year catch up?

[JotikaT2]

I recommend making sure your software is updated.

Manually updating software steps

If you have already updated your software, your other option is to send us a diagnostic file so we can determine why the entries are giving you an error.

If you are in the desktop version where you purchased a CD:  

On your menu bar at the very top, click “Online” and then “Send Tax File to Agent”. 

When you click to send, you will get a pop-up with a token number. 

Reply with the token number and I’ll be able to open a TurboTax file with your numbers but not your personal information. 

If you are using the online program:

Go to the black panel on the left side of your program and select Tax Tools.

Then select Tools below Tax Tools.

A window will pop up which says Tools Center.  On this screen, select Share my file with Agent. 

You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.

Reply to this thread with your Token number.  This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

[Maxitout]

It's March.  Are we still waiting for a fix?  Has anyone been able to get this to work?  What the what!

[JotikaT2]

The software has been updated. 

What type of a fix are you waiting for? 

Are you still having issues?

Please comment with more specific information so we can assist you.

[Maxitout]

I am still having issues with the 403(b) catch-up for 15 years service.  Last year was the first year I claimed any catch-up for my 403(b), and unfortunately my employer only included the over-50 deferral amount and failed to include the the deferral for the 15 yr catch-up.  Nevertheless, because the 15-yr must be taken first if available, $3,000 of the lifetime limit of $15,000 was used up.  But there is no question that I qualify this year for both.  I am getting the message reported by others that only $25,000 could be deferred for this account.

I am providing a ticket number so that TT can take a look at my diagnostic:  627307.  Any help will be appreciated.

[vkamat]

This issue is still present in the online version of TurboTax and insists that we owe a penalty with no visible workaround. Could you please let us know how to resolve this in the online version? Thanks!

[vmk1]

I am getting the error message for this year that i overpaid my 403b and it is not recognizing the 15 year catch up provision again.

When will TT update the software to fix for current year?

[NashayLO]

Catch-up contributions to 403(b) for employees with 15 years of service are not supported in TurboTax.

Please see this TurboTax FAQ for more information, Are there any personal (individual) tax situations...

[amandawayneingram]

Exactly how hard would it be to right code for this situation?  It's not like it hasn't been an issue for YEARS now.  Pretty sad, I'd say.   From all of the reading I've done, sounds like the end result is that I won't be able to electronically file my return.  Is there anything that I need to correct my return so that we don't get penalized?

[RobertB4444]

@amandawayneingram  You should be able to adjust the contributions on your W2 to allow for the program to print your return.  Then you can attach the W2 to the return so that the IRS sees the actual catch up contributions and paper file it.  No penalties necessary.

[amandawayneingram]

I adjusted nothing and Turbo Tax e-filed, so I'm not sure where I stand.  Was I overtaxed?  Do I need to file an Amended Return?

[AmyC]

If you have a Form 5329 in your return showing a penalty for the excess, then you will need to file an amended return.

@amandawayneingram

[amandawayneingram]

No Form 5329 attached to my return.  Thank you for your help.

[Opus 17]

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@AmyC wrote:

If you have a Form 5329 in your return showing a penalty for the excess, then you will need to file an amended return.

@amandawayneingram

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This is not a situation that is penalized on form 5329.

[amandawayneingram]

Please explain.

[Opus 17]

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@amandawayneingram wrote:

No Form 5329 attached to my return.  Thank you for your help.

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Unfortunately, this is very old discussion that mostly seems to be about how to update turbotax.  For a better answer to your question, I suggest you create a new question instead of adding to an old question.

Briefly, Turbotax does not support the special $3000 catch-up contribution for certain employees covered by 403(b) plans.  The consequence of reporting what Turbotax considers to be "excess" contributions is that the excess is added back to your taxable income.  For example, if your W-2 shows $50,000 of box 1 taxable wages and you had $3000 of excess retirement contributions, your form 1040 line 1 taxable wages would show as $53,000.  You are paying tax on the excess contribution that should have been tax-deferred.

Of course, this is a very simple example, and it may not be easy to figure out if paid tax on the excess if your tax situation is complicated (multiple W-2s, other kinds of income, etc.). You should print a copy of your return and review it carefully.

The only way to fix this when filing an original tax return is to be using the desktop version of Turbotax installed on your own computer and overriding the calculation.  Overrides void the accuracy guarantee and can't be e-filed.

If you did end up paying tax on the $3000 "excess" contribution and need to file an amended return, you will also need to download and install Turbotax on your own computer and perform a manual override, then print and mail the amended return.  Customer support can provide a download to your account if you previously paid for the online version.