What is the maximum allowed contribution to a 403(b) retirement plan?

[knoberle]

As a teacher over the age of 50 with over 15 years on the job I calculated the following: $19,000 reg. contribution + $6000 over 50 catchup + $3000 15 year catchup = $28,000

[RobertG]

The limit on elective deferrals - the most an employee can contribute to a 403(b) account out of salary - is $19,500 in 2020 ($19,000 in 2019).

Employees who are age 50 or over at the end of the calendar year can also make catch-up contributions of $6,500 in 2020 ( $6,000 in 2015 - 2019) beyond the basic limit on elective deferrals.

If permitted by the 403(b) plan, an employee who has at least 15 years of service with a public school system, hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization), has a 403(b) elective deferral limit that is increased by the lesser of:

1. $3,000,
    
2. $15,000, reduced by the amount of additional elective deferrals made in prior years because of this rule, or
    
3. $5,000 times the number of the employee’s years of service for the organization, minus the total elective deferrals made for earlier years.

Retirement Topics - 403(b) Contribution Limits

[knoberle]

Turbotax incorrectly flags a 403(b) contribution of $27,500 (19,000 /Reg + $6000/Over 50 + $2,500/15 yr catchup) as incorrect indicating a maximum allowable contribution of $25,000 for 2019 with an overpayment of $2,500. In a browser search I found that this problem was flagged by other users over a year ago.  I ran my calculation through Fidelity's online 403(b) calculator and came out with a maximum allowable contribution of $28,000 or 2019. Can you explain this problem? Am I correct that the maximum is $28,000?

[mpendzich]

The IRS limits for how much you can contribute to a 403(b) plan in 2021 are-- 

$20,000	This is the basic retirement plan deferral limit for each employee.
$6,000	Employees age 50 and over can contribute this amount to a retirement plan in addition to the 403(b) Elective Salary Deferral Limit.
$3,000	This special retirement plan catch-up is for certain employees who have at least 15 years of service

TurboTax is incorrectly stating that I have contributed $3000 too much. How do I get TurboTax to accept my full contribution as legitimate? 

[DianeW777]

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

TurboTax CD/Download:

1. Click on Online in the top left menu of TurboTax CD/Download for Windows
2. Select 'Send Tax File to Agent'
3. Write down or send an image of your token number then place in this issue.
4. We can then review your exact scenario for a solution.

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

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

@knoberle

@mpendzich

[Opus 17]

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@mpendzich wrote:

The IRS limits for how much you can contribute to a 403(b) plan in 2021 are-- 

$20,000	This is the basic retirement plan deferral limit for each employee.
$6,000	Employees age 50 and over can contribute this amount to a retirement plan in addition to the 403(b) Elective Salary Deferral Limit.
$3,000	This special retirement plan catch-up is for certain employees who have at least 15 years of service

TurboTax is incorrectly stating that I have contributed $3000 too much. How do I get TurboTax to accept my full contribution as legitimate? 

---

Turbotax doesn't recognize the special $3000 catch-up provision for certain 403(b) plans.  I don't remember if there is a workaround.  You may have to use another provider, upgrade to the full Live Online version so a tax preparer can override the program, or be prepared to do the overrides yourself (which requires that you be using the desktop version installed on your own Mac or PC.)

@dmertz 

@macuser_22 

[macuser_22]

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@Opus 17 wrote:

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@mpendzich wrote:

The IRS limits for how much you can contribute to a 403(b) plan in 2021 are-- 

$20,000	This is the basic retirement plan deferral limit for each employee.
$6,000	Employees age 50 and over can contribute this amount to a retirement plan in addition to the 403(b) Elective Salary Deferral Limit.
$3,000	This special retirement plan catch-up is for certain employees who have at least 15 years of service

TurboTax is incorrectly stating that I have contributed $3000 too much. How do I get TurboTax to accept my full contribution as legitimate? 

---

Turbotax doesn't recognize the special $3000 catch-up provision for certain 403(b) plans.  I don't remember if there is a workaround.  You may have to use another provider, upgrade to the full Live Online version so a tax preparer can override the program, or be prepared to do the overrides yourself (which requires that you be using the desktop version installed on your own Mac or PC.)

@dmertz 

@macuser_22 

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Sorry, That is not something that I know about.

[dmertz]

As far as I know there is no workaround and it will be necessary to use overrides with the CD/download version of TurboTax and mail the tax return.

[mpendzich]

My token number is 951480. I really appreciate your assistance. Sincerely, Margaret

[DianeW777]

When I load your return in TurboTax CD/Download the error does not appear and you do have the full amount of $29,000 in the W-2. I made no changes or overrides to the return and after Smart Check there is no message or error about the contributions to your 403(b) plan.

The best plan of action to move forward and e-file your return is to switch from using TurboTax Online to TurboTax CD/Download.  Follow the procedures below.

• How do I switch from TurboTax Online to TurboTax CD/Download?

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