401k "catch up" contributions in Massachusestts
Pattylu
7 Posts
Has the state of Massachusetts conformed to the current version of the IRS code, which would allow employees to contribute an extra $1,000 to their 401k plan if they are over the age of 50?
Comments
If an employer does decide to add the catch up contribution to it's retirement plan, the company must ensure that it is offered to all eligible employees. Based on EGTRRA, all employees who will be 50 years or older during the plan year (even if their 50th birthday is during the last month of the plan year), and who either max out at the federal 402(g)limit, or the plan contribution limit, are considered "eligible" employees.
I am assuming your question relates to whether or not Massachusetts will exclude the additional $1000 catch up deferral from state income tax. As of the beginning of the year, Massachusetts didn't conform to the EGTRRA tax provisions, so the $1000, while being exempt from federal income tax withholding, was still considered taxable for MA income tax purposes.
Massachusetts did however, finally adopt legislation to comply with the Federal EGTRRA changes. On July 25th, the MA Senate passed H.B. 5250 which brought MA in line with the retirement and education provisions of EGTRRA. Gov. Swift had earlier vetoed the bill, but both the Senate and House overrode her veto. The change was made effective retroactive to January 1, 2002.
The actual link to the bill is: [url]http://www.state.ma.us/legis/bills/house/ht05250.htm[/url]
...this must not be the same forum I have been reading faithfully for months now...x:D
No apologies needed, we got SOOOO much conflicting information last year about the EGTRRA changes that I had to do some serious digging to get all the info and translate it into English. Our Client Service Rep at our 401K administrator said one thing, our Client Service Manager said another thing, the 1001 websites about the changes didn't give enough detail. It was enough to drive me crazy.
Your administrator was right on one point though, if the company elects to include the catch up provision, then ALL eligible employees need to be given the opportunity to take advantage of it.
I guess it would be too much to ask for government to actually make things simple and clear-cut. Ah well, I can dream...xpray
[url]http://www.americanbenefitscouncil.org/documents/state_update100202.pdf[/url]
It not only gives you what states have/have not yet conformed, but also gives you specific legislation information (bill #, when passed, etc.) From there you can go to the individual state DOR websites and look up the exact legislation.
You can stay updated by going to their website, [url]www.americanbenefitscouncil.org[/url].
Use the drop down on "Issues", and select "Retirement". From that drop down, click on "State Issues". It will bring you to the site with the state updates.
But can I telecommute from MA? I already tried living down south (went to college at UNC-Chapel Hill, go Tarheels!), and decided that I was definitely not meant for the south or the mid-west. I have all of those wonderful little idiocyncracies (SP?) that us Northerners are known for:
1.) Serious coffee/caffeine addiction - try getting an iced coffee down south on a 90+ degree day (the ONE Dunkin Donuts I could find poured hot coffee over a cup of ice!?!?!?!?)
2.) Talk WAAAAAAYYYYYYY too fast - first time I met my roommate, it took her about 15 minutes to get caught up to speed on what I was saying)
3.) Drive in the break down lane - anyone who has lived/worked on the Rte 128 belt in MA knows what I mean :oo
4.) My alphabet only has 25 letters, I dropped most Rs from my vocab - kind of like Mayor Quimby on the Simpsons
The list could go on and on....
But........ if I could telecommute, I say, "where do I sign?" To work with the infamous Don D x:-) , just think of the kind of money I could earn off of a tell-all book.
Seriously though, I am just glad I can add every once in a while to some of these threads. I work in payroll( just got my CPP designation, yeah!), which reports to the finance department in my company. I also have a lot of benefits and HRIS work thrown in with my job, but I ADORE the HR work as well. I'm a glutton for punishment, but I love the research. (Sick and twisted, I know). HR has such a unique duty and responsibility, I find myself coming back for more (again with the sick and twisted, I know). I've gotten so much from this BB, I'm just happy when I can throw a bone in every now and then!
(Don't tell anyone I am not full-fledged HR, I don't want to be kicked out!) xpray