As many organizations start preparing for year end, human resources and benefits specialists are receiving calls from employees regarding their retirement account contributions. For those of you who support employees participating in 401(k) (other than a SIMPLE 401(k)), 403(b), SARSEP, or governmental 457(b), it is important to know that elective deferrals are not treated as catch-up contributions until they exceed the limit of $18,000 in the 2015 - 2017 period, according to the IRS. For more, click here.

To assist you and your team, we are providing this step-by-step guide as to when you should use catch-up -- and how to input the information using Infor’s BSI TaxFactory™.

If you have employees who are 50+, review catch-up options with them. If you find that they need to implement one of those options, you will need to update any IRS Defined Contribution limits (i.e. 401k, 403b, etc.) in BSI TaxFactory™, along with updating/reviewing the End Dates for the various Tax Authorities to which you are tied.

  1. Within BSI TaxFactory™ click on Payment Overrides and then review every Group Code which is currently used. We always highly recommend that you create a new record for each Authority, especially when the Maximum Limit is changing, so that history is maintained.  
  2. Take a screenshot of a previous year’s record prior to creating the New Year’s record.
  3. Create a new record for the New Year for each Authority. For example if you have records for Minnesota, Wisconsin, Iowa, and Federal, create those four records for the New Year.  
  4. Ensure that you update the Start Date, End Date, and Maximum Limit fields for the new records.

Please note that you will NOT receive any error messages within BSI TaxFactory™ if you fail to follow any of the steps outlined above. However, when employees reach the standard IRS Defined Contribution limits, their contribution will stop even if they are tied to a BSI Group Code within Infor.  

Have more questions about catch-up, benefits, year end, or your Infor application?

Velocity’s global Infor functional and technical support team is here to help. Simply click here, call us at 1.888.430.9252.