new benefits plan - seperate bucket for after tax money
hi everyone
I have to implement a new savings plan for my client. The contribution limits are same as that of existing 401K plan but it only have after tax contributions. There must be a clear distinction between the basic and the supplement money, but this would become a more difficult task if the new plan were lumped in the same after tax money.
I do understand that I’ll have to configure atleast four wage types (basic & supp for Union and Non-union). I am totally lost when I start thinking of having the after tax amount for this specific plan in a different bucket. I might need to cumulate the amount to a different wage type…
Can anyone help me here?
Vicky
Why do you need to use seperate wage types for basic & supplemental (bonus) and for Union & Non-union?
We use one wage type for all them.
If you are in the US, you will need to accumulate the after-tax dollars in a seperate wage type. The pre-tax amount needs to be reported on the W2, so you wouldn't want to mix pre & post in a single wage type.
PSM
this is how it is done in my company currently ... because of the difference in max. contribution limtation between union and non-union employees.....
since i'm working on implementing Roth 410k.. which consits of only post tax money ...which is to be treated as pre-tax....
as per IRS.. Roth is post tax which is treated as pre tax when it comes to limits..
i hope the above would help you in understanding why the new plan has to have seperate wage types of pre and post.
V
Your question is not clear, be more precise
thanks for enquiring ...
here is the scenario.. i am configuring a new Benefit plan for my client ---- "Roth 401k"
when compared to a regular 401k (post tax & pre tax), Roth consists of only post tax money. this post tax money has to be treated as regular pre tax money (that means that all 401K pre-tax limitations will apply-- such as max of $15000 on EE pretax contribution ).
now we outsource this data to an outside vendor. both pretax and post tax wages types are sent seperately. i somehow have to send wage types for roth as well ... its just that the Roth post tax money cannot be sent as a part of 401k post tax money, so it has to be cumulated seperately.
by now i know that i need to configure 4 wages types for this new befit plan (union & non-union, basic and supplement)... i am slightly confused with two processing class 65 and 71...
if you understood my problem... can you suggest me something? or we can also start discussing..