Blast from the past... This is regarding traditional After Tax (not ROTH).
I have a Ptp contributing $16,000 as After-tax. Does after tax fall under 415 limits or 402g limits? I believe it's 415 but I can't find anything to back me up. Can I get a second?
Thanks!
Full Version: After Tax contribution limit
So is the question that 
elementary or that confusing?
elementary or that confusing?
Employee contributions (after-tax voluntary or required / NOT ROTH) are considered annual additions in regards to the §415 limit.
The 402(g) limit, however, only applies to deferrals. This would include Roth, but would not include employee contributions.
The 402(g) limit, however, only applies to deferrals. This would include Roth, but would not include employee contributions.
Definitely 415 and not 402(g). Isn't there a 6% limit?
Annual additions used to include after-tax employee contributions equal to the lesser of (i) employee contributions exceeding 6 of compensation, or (ii) 1/2 of the employee contributions. That treatment ended with TRA '86, effective for years beginning after 12/31/1986. Perhaps that's the 6% you're remembering.
And just remember: After Tax contributions get tested under ACP.
In one of my former jobs, the person handling a case tested the after-tax under ADP and the plan passed for 4 years. Then after she left the company, someone noticed the error. When he retested it for the 4 years, the test failed! Every year! Lots of QNEC and lots of angry calls & letters and lots of checks written to their lawyers (and some to cover the QNECs, everything got straightened out. And, to my knowledge, the case is still with that provider.
In one of my former jobs, the person handling a case tested the after-tax under ADP and the plan passed for 4 years. Then after she left the company, someone noticed the error. When he retested it for the 4 years, the test failed! Every year! Lots of QNEC and lots of angry calls & letters and lots of checks written to their lawyers (and some to cover the QNECs, everything got straightened out. And, to my knowledge, the case is still with that provider.
QUOTE
Annual additions used to include after-tax employee contributions equal to the lesser of (i) employee contributions exceeding 6 of compensation, or (ii) 1/2 of the employee contributions. That treatment ended with TRA '86, effective for years beginning after 12/31/1986. Perhaps that's the 6% you're remembering.
Yes, thanks. Sorry for the distraction.
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