15 Year Catch up for 403b

[tractng]

Can someone interpret this, particularly item #3 of the link.

https://www.irs.gov/retirement-plans/[product key removed]-up-contributions

Let say I have worked at the current job 17 years (Feb 6th 2024 will be 18th years).  So 17 x $5000 =$85000.  If my total contribution to the 403b is $82300, I would be allowed only $2700 for 2024?

The last two years I had been able to contribute $3000 each year to the 15 year catch up plan.

Thanks,

TT

[Anonymous_]

I will page @dmertz 

[dmertz · Accepted solution]

This is probably a question for your plan administrator.  I don't have any specific experience with this calculation, so I'm not sure if you should be multiplying $5,000 by 17 or instead by 18.  If for 2024 you must multiply $5,000 by 17,  your calculation appears to be correct.

[Opus 17]

Also be aware, that if you are contributing the maximum deferral for 2024 ($23,000 plus $7500 plus $2700 special catch-up), when you do your 2024 taxes, turbotax will not recognize the special 403b catch-up rule and will warn you that you have an excess contribution that you need to remove.  (Turbotax has never understood the special 403b catch-up.)    

I believe the consequence is that the $2700 "excess" will be added back to your taxable income.  The workaround is to change what you enter for box 12 of your W-2, to the regular maximum amount.  This should not cause issues with the IRS.  And you may want to check back here in January 2025 to see if the program has improved by then.  

[tractng]

Good to know.  Last year when I did my tax (got the warning)and posted a question here.  I was told to ignore it (I never looked at the actual number to see if it was added to the taxable calculation as you mentioned).

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/retirement-contribution-overpaym...

Edit: I just looked at my  2022 Tax return, that $3000 was not added to the taxable income.

TT