How is the SECURE 603 high-earner threshold amount determined?

Section 603 high-earners are based on their aggregated Social Security taxable wages.

The SECURE 603 High Earner Threshold Amount calculation value definition stores the applicable threshold used for the evaluation year.

When configured to check for SECURE 603 catch-up eligibility, the Start-Of-Year Process flow uses this threshold to determine whether an employee is a high earner.

Note:

Because the threshold is indexed, review the predefined value before running the Start-of-Year flow for the new year.

Understand SECURE 603 Start-of-Year Output

When you run the SECURE 603 Catch-Up Eligibility Update data type, the Start-of-Year process generates an output file you can use to review the evaluation results, proposed updates, applied updates, skipped records, and warnings.

The output file contains one row for each payroll relationship evaluated. In the Draft mode, the output shows preview results only. No Reporting Information card updates are applied. In the Final mode, the output shows the actions applied or skipped by the process. Updates are applied to the Eligible for Pretax Age Catch-Up Contributions field on the Reporting Information card.

The output includes these key values:

SECURE 603 Start-of-Year Output column values

Column	Description
Person Number	Identifies the employee associated with the payroll relationship evaluated by the process.
Payroll Relationship Number	Identifies the payroll relationship evaluated by the process. Reporting Information card updates are applied at this level.
Evaluation Level	Identifies the grouping level used by the process, such as Payroll Statutory Unit, Tax Reporting Unit, or Tax Group. If no value is configured, the process defaults to Payroll Statutory Unit.
Evaluation Entity Name	Identifies the specific grouping that drove the result. For Payroll Statutory Unit evaluation, this is the PSU. For Tax Reporting Unit evaluation, this is the TRU. For Tax Group evaluation, this is the Tax Group.
Prior-Year Social Security Taxable Wages	Shows the prior-year Social Security taxable wages used for the evaluation. When the evaluation level is Tax Reporting Unit or Tax Group and more than one unit is evaluated, this value reflects the threshold-driving or highest evaluated wage amount used to derive the final result.
High-Earner Status	Indicates whether the employee is classified as a SECURE 603 high earner based on the prior-year Social Security taxable wages and the SECURE 603 high-earner threshold.
Current Pretax Catch-Up Eligibility	Shows the current-year value of Eligible for Pretax Age Catch-Up Contributions on the Reporting Information card before the process applies any Final mode update.
Proposed Pretax Catch-Up Eligibility	Shows the value derived by the process. The value is No when the employee is classified as a SECURE 603 high earner. The value is Yes when the employee isn’t classified as a SECURE 603 high earner.
Update Action	Indicates what the process did or would do: Create, Update, No Change, or Skipped. In Draft mode, this is the intended action. In Final mode, this is the applied or skipped action.
Update Reason	Explains why the update action was assigned, such as High Earner, Below Threshold, Manual Override, No Data, or No Change.
Run Mode	Indicates whether the process was run in Draft mode or Final mode.
Warnings	Identifies conditions that require review, such as manual override, missing data or setup, multiple payroll relationships across PSUs, or a Reporting Information card that starts after January 1.

Review the warnings before running the process in Final mode. Warnings might identify conditions such as manual override, missing data or setup, multiple payroll relationships across PSUs, or a Reporting Information card that starts after January 1.