What is the maximum elective deferral to a 403(b)?

[guz1]

15-year of service catch-up contribution to a 403(b)

[MinhT1]

For 2024, the maximum contribution for a 403(b) plan is $23,000 for an employee under age 50. For those aged 50 or over, there is a maximum catch-up contribution of $7,500.

The IRS also says:

If permitted by the 403(b) plan, an employee who has at least 15 years of service with the same eligible 403(b) employer - 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.

Please read this IRS document for more information.

[guz1]

That does not take into account the 15-year of service catch-up contribution of $3,000.
TurboTax is not recognizing this allowable contribution to a 403(b).

[guz1]

TurboTax says that I have an overpayment of $3,000. The program is not correct.

[KeshaH]

If you'd like, we can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

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[guz1]

Hi, I am using TurboTax Online. After I log in, I do not see Tax Tools on the left hand panel. I've tried using three different browsers with the same result. I see "Live Tax Advice" on the top right toolbar. I searched Tax Tools and nothing came up. I would love to resolve this. thank you for your help.

The left hand panel options are:
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[KeshaH]

Click on Review/Edit or Pick up where I left off on any of the tax return topics to open up your return. Then you'll see Tax Tools on the left hand panel.

[guz1]

Thank you for that. The token number is 1274454
The issue  is my wife's W-2 Box 12 E-Elective deferrals to 403(b) is $33,500
I get the error message that says "The maximum salary deferral retirement plans for 2024 is $30,500." It then points me "Read IRS Publications 560 Retirement Plans for small business". Apparently TurboTax also generated Form 5330 for the excess contribution of $3,000.
The correct IRS Publication is 571 Tax-Sheltered Annuity Plans (403(b) Plans For Employees of Public
Schools and Certain Tax-Exempt Organizations. 4. Limit on Elective Deferrals
The general limit for 2024 is $23,000
The 15-years of service catch up is $3,000
The 50 or over make-up contribution for 2024 is $7,500
Total allowable 403(b) for 50+ with 15 years of service is $33,500.

TurboTax is not picking up that the deferral is into a 403(b) nor the 15-years of service catch up of $3,000.
Thanks again.
 

[guz1]

Is TurboTax going to address this issue?

[KeshaH]

Thank you for providing your token number. We will take a closer look at this issue and get back with you.

[guz1]

Any update on this?

[Opus 17]

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@guz1 wrote:

Is TurboTax going to address this issue?

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Practically, no.  Turbotax does not, and has never, recognized the extra $3000 catch-up for a 403b.  However, this is a non-issue.  Just ignore the warning and file your tax return. It will not cause any change in your tax or mistake in your return.   (That is to say, I don't believe turbotax can add the $3000 back to your income automatically.  It may warn you to do so, you can ignore the warning.)

[guz1]

Thanks Opus 17.
I was concerned that TurboTax automatically generated IRS Form 5330 for the excess contribution of $3,000. 

[Opus 17]

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@guz1 wrote:

Thanks Opus 17.
I was concerned that TurboTax automatically generated IRS Form 5330 for the excess contribution of $3,000. 

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I don't believe it does, however I will rely on another expert @dmertz  to confirm. 

[dmertz]

TurboTax does not support Form 5330.

With regard to your individual tax return, Form 5330 would only apply if you made an uncorrected excess contribution to a self-employed retirement plan.