topic Catch-Up Limit For 401K Contributions in Deductions & credits

Catch-Up Limit For 401K Contributions

Scott Henkel — Fri, 25 Dec 2020 13:15:51 GMT

According to WWW.IRS.GOV, the catch-up limit for 401K contributions is $6,500 in 2020. However, in the Keogh, SEP, Simple Contribution Worksheet in Turbotax Business 2020, the catch-up limit is shown as $6,000. Which of those is correct? Is there an error in that worksheet or does the $6,500 catch-up limit not apply for an Owner K plan?

Re: Catch-Up Limit For 401K Contributions

Critter-3 — Fri, 25 Dec 2020 13:21:01 GMT

Much of the 2020 program is still not up to date yet ... many updates will happen between now and when the efiling will be open. Make sure to run updates at least weekly.

Re: Catch-Up Limit For 401K Contributions

dmertz — Fri, 25 Dec 2020 14:15:57 GMT

You are correct. The 415(c) limit appear to have been corrected for 2020 (line 8, even though the form text has not been corrected), but not the regular elective-deferral limit or the catch-up elective-deferral limit. History has shown that TurboTax developers seem to be somewhat inept at simultaneously correcting all of the cost-of-living adjusted values on this worksheet, but they do eventually get it corrected. This situation occurs every year that there is a COL change in these values.

Re: Catch-Up Limit For 401K Contributions

Scott Henkel — Mon, 28 Dec 2020 11:49:46 GMT

Thank you for your reply. Based on this, I will assume that the amount for the catch-up contribution will be changed to $6,500 for 2020 on the Keogh, SEP and SIMPLE Contributions Worksheet in a later update to Turbotax. As of today, that change has not yet been made in Turbotax; but I will continue to look for updates to the program in the near future.

Thank you for your follow-up on this.

Re: Catch-Up Limit For 401K Contributions

Scott Henkel — Wed, 27 Jan 2021 14:28:37 GMT

The catch-up limit for 401K Contributions in the Keogh, SEP, and Simple Contributions Worksheet is still set to $6,000. Per the earlier series of messages, it was my understanding that this should be $6,500 in 2020. It was also my understanding that this would be fixed in Turbotax.

As of January 27, this has not yet been fixed in Turbotax. When will this be fixed in Turbotax?

Re: Catch-Up Limit For 401K Contributions

dmertz — Wed, 27 Jan 2021 14:40:56 GMT

Nobody knows when it will be fixed, despite this having been reported many times this year. This is a recurring problem with TurboTax every time these limits change.

The IRS 2020 filing season doesn't open until February 12.