Set up a Pre-Tax Deduction Group

You can use the PR Pre-Tax Deduction Groups form to set up groups for pre-tax deductions that share an annual limit.

The following instructions detail how to create a pre-tax deductions group.

  1. Open the PR Pre-Tax Deduction Groups form.
  2. In the Pre-Tax Group field, enter a number for the group. Press F4 to see a list of existing groups.
  3. In the Description field, enter a description for the group.
  4. In the Annual Limits section, set the following:
    1. Standard Contribution Limit - For standard or Roth employee 401(k) contributions, enter the standard annual limit amount. The annual limit must be a positive number (greater than 0.00). If you enter zero, the system assumes there is no limit.
    2. Catch-up Contribution Limit #1 - Enter the annual limit for employee 401(k) catch-up contributions. Applies to eligible employees (50+) who wish to withhold amounts beyond the normal limit.
    3. Compensation Limit - Enter the annual compensation limit to apply to all 401(k) employer match liabilities.
  5. In the Secure Act 2.0 Limits section, set the following:
    1. Catch-up Contribution Limit #2 - Enter the annual contribution limit for Secure Act 2.0 catch-up contributions. This catch-up limit applies only to employees within the specified Minimum Age / Maximum Age range.
    2. Minimum Age - Enter the minimum age for the additional catch up contribution.
    3. Maximum Age - Enter the maximum age for the additional catch up contribution.
    Note: The annual catch-up contribution limit and minimum/maximum age requirements are defined by the IRS. For information about how the system determines minimum/maximum age eligibility, see PR Pre-Tax Deduction Groups Form.
  6. Save the record.

Once you set up a pre-tax deduction group, you can associate it with pre-tax deductions that share the same annual limit. For more information, see Creating Deduction and Liability Codes.