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IT0165 - Limits on Deductions

Hello,

My client has a requirement to match employees' 401K to either a percentage or the annual gross salary, whichever is greater. I think IT0165 can manage this from all that I have read but I wanted to know if anyone has used this solution before and what potential pitfall there might be in using this solution. Any suggestions are welcome. If there is also a better solution, I am open to hearing it. Thanks.

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1 Answer

  • Oct 30, 2015 at 08:59 AM

    Hi Godwin,

    The only issue will happen if P0169 parameter 1 is set to CHK and end date of IT0165 may fall in different period due to 401K calculation happening for check date which may ahead of the period end date and not same as end date.

    Suppose, PP 26/2015 of bi-weekly payroll has period end date as 12/19/2015 and period check date as 12/25/2015.

    PP 01/2016 of bi-weekly payroll will now have start and end dates for period as 12/20/2015 and 01/02/2016 with check date as 01/07/2016.

    401K for employee will calculate for PP 26 based on 12/25/2015 input of IT0169.

    This applies to 2015 year 401K limit only.

    401K for employee will calculate for PP 01 based on 01/02/2016 input of IT0169.

    This applies to 2016 year 401K limit only.

    If IT0165 is entered with end date as 12/31/2015 then this date falls in PP 01/2016 i.e. between start and end dates of first period in 2016 and IT0165 limit from previous year 2015 will apply now on 401K in current year 2016.

    To avoid this IT0165 will be required to be end dated as 12/19/2015 so limit of IT0165 for 2015 only applies to same year and does not apply on 2016 year for 401K.

    Thanks,

    Ameet

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