Writing a Check for Catch Up Contributions
A client was told by their employer that he can write a check for his 401k catch up contribution. My understanding has always been that all deferrals and catch up contributions must be made via salary deferral. Unless I am wrong, can someone point me to the IRS regs that clearly states all deferrals AND CATCH UP CONTRIBUTIONS MUST BE MADE VIA SALARY DEFERRAL? I tried checking the IRS website, but couldn’t find anything.
Thank you!
Permalink Submitted by Alan - IRA critic on Fri, 2013-02-01 03:08
It appears you are right. I don’t see anything in these Regs to suggest any exceptions, but you should still suggest that the client ask the employer why they think he can do this….here is a copy of the catch up Regs: http://www.taxalmanac.org/index.php/Treasury_Regulations,_Subchapter_A,_Sec._1.414(v)-1