How the Payroll Process Determines Pretax Catch-Up Contribution Eligibility

The payroll process determines whether it can process pretax catch-up contributions for an employee based on their deferred compensation setup, age, and Eligible for Pretax Age Catch-Up Contributions setting on their Reporting Information card.

When you run payroll, the process:

1. Checks whether the employee has a pretax catch-up contribution election or eligible catch-up setup, such as:

   • Associated element entry, such as 401k Pretax Catch-Up

   • Employee catch-up contributions are enabled on their 403 (b) or 457 (b) card components.

2. Checks whether the employee is 50 years or older in the current calendar year.

3. Checks the Eligible for Pretax Age Catch-Up Contributions value on their Reporting Information card.

4. Based on these results, if the employee is eligible and has a valid pretax catch-up setup, the process calculates the deduction. Otherwise, it sets the deduction to $0.

Note:

The payroll process doesn't evaluate the prior-year's Social Security taxable wages. SECURE 603 high-earner determination is reflected by setting Eligible for Pretax Age Catch-Up Contributions on the employee Reporting Information card.