I received the following note from my company:
2024 SSP Contribution Limits – Highly Compensated Employees
Based on our recent analysis using IRS guidelines, your 2024 contributions to the SSP will be limited to a total of 25 percent, which can be any combination of Before-Tax, Roth and/or After-Tax Contributions. If you have elected to contribute more than 25 percent, your contribution percentage will be automatically reduced effective with the first pay period of 2024.
For 2024, combined Before-Tax and Roth Contributions to the SSP are restricted to $23,000 under IRS limitations.
Questions:
1. Last year, I contributed 30% to my 401k (combined before and after-tax which will be converted with mega backdoor roth). Even with 30%, I still managed to stay under the IRS $66,000 limit for combined employee and employer contributions ($22,500 pretax, the rest is after-tax) . My salary has not increased this year.
With a HCE status, are we required to contribute less even though it is still under the IRS limit? Is there a separate limit for HCE? The 25% limit the company told me, is that the IRS limit or calculated by the company?
2. Am I still allowed (legally) to do mega backdoor roth conversion as a HCE?
3. My spouse makes similar salary as me (different company) but has not received the same notification indicating HCE status. He also contributed the same amount to 401k. Is he now required to reduce his 401k contribution also because we are married and filing tax jointly?
Thanks for any respond.
2024 SSP Contribution Limits – Highly Compensated Employees
Based on our recent analysis using IRS guidelines, your 2024 contributions to the SSP will be limited to a total of 25 percent, which can be any combination of Before-Tax, Roth and/or After-Tax Contributions. If you have elected to contribute more than 25 percent, your contribution percentage will be automatically reduced effective with the first pay period of 2024.
For 2024, combined Before-Tax and Roth Contributions to the SSP are restricted to $23,000 under IRS limitations.
Questions:
1. Last year, I contributed 30% to my 401k (combined before and after-tax which will be converted with mega backdoor roth). Even with 30%, I still managed to stay under the IRS $66,000 limit for combined employee and employer contributions ($22,500 pretax, the rest is after-tax) . My salary has not increased this year.
With a HCE status, are we required to contribute less even though it is still under the IRS limit? Is there a separate limit for HCE? The 25% limit the company told me, is that the IRS limit or calculated by the company?
2. Am I still allowed (legally) to do mega backdoor roth conversion as a HCE?
3. My spouse makes similar salary as me (different company) but has not received the same notification indicating HCE status. He also contributed the same amount to 401k. Is he now required to reduce his 401k contribution also because we are married and filing tax jointly?
Thanks for any respond.
Statistics: Posted by Love4Learning — Wed Jan 03, 2024 12:34 pm — Replies 5 — Views 465