Setting Up 401K, 401K Roth, 401K Catch Up, and 401K Roth Catch Up Deduction Types

Access the U.S. Legislative/Regulatory form.

Select Pre-Tax Deduction type or Fringe Taxable Benefit type

Select an option that allows Vertex to use current tax laws in various jurisdictions to determine whether a DBA is pre-tax for a specified tax area.

• For 401K, select 401k Deferral.

• For 401K Catch Up, select 401K CU2 >50.

Select Post Tax Deduction or Benefit Type

Select an option that allows Vertex to use current tax laws in various jurisdictions to determine whether a DBA is post-tax for a specified tax area.

For 401K Roth, and 401K Roth Catch Up, select Roth IRA.

When you set up the DBA instructions for 401k Deferral, 401K CU2 >50, and Roth IRA under the same group limit code, you can restrict the withholding percentage or amount when an employee meets their annual limit for 401K and 401K Roth, and begins their catch up plan deductions.

The DBA instructions must use amount rate 1 for the regular 401K and 401K Roth deductions, and amount rate 2 for the 401K Catch Up and 401K Roth Catch Up deductions. The group limit for these deductions must have annual limit 1 amount defined in order to control the progression from amount rate 1 to amount rate 2.

When the deductions are set up to limit the employee withholdings by either the group limit maximum percent or group limit pay period, the employee withholding is limited to the amount/rate specified on the catch up plan. When the employee withholds amounts for 401K, 401K Catch Up, 401K Roth and 401K Roth Catch Up, 401k Catch Up is limited by amounts withheld for 401K deductions on the current check. 401K Roth Catch Up is limited by amounts withheld for 401K Roth deductions on the current check.