Understanding Section 603 – Pre-tax CU to Roth CU – Exception Report
You can use the Section 603 – Pre-tax CU to Roth CU – Exception report to identify employees moved from a pre-tax 401K Catch Up to a post-tax Roth Catch Up in prior years and may no longer meet the Secure Act 2.0 Section 603 requirements of prior year compensation amount and Catch-Up eligibility. The Section 603 – Pre-tax CU to Roth CU – Exception report automates the process of determining employees based on the following criteria:
- Employees enrolled in a pre-tax 401K Catch Up plan aged 50 or older (anytime in the calendar year based on their birth date).
- Employees who have earned less than $145,000 in social security wages in the prior year.
- Employees who were moved from 401K Catch-Up to Roth in prior years.
This exception does not apply if the employee wages for the previous year are unavailable.
This report can be run either through R073222 or in standalone mode. Based on the processing option values, this report displays the eligible employees who meet the following criteria:
- Roth DBA has already been created by the report R073222.
- Gross wages of the employee for the previous year do not exceed the social security wages limit specified in the processing options.
The report displays the current status of the Roth and Catch-Up DBA details of the listed employees from the Employee DBA Instructions.