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OHAUSBEN200 - Set up catch up contributions

CL_GUI_FRONTEND_SERVICES - Frontend Services   RFUMSV00 - Advance Return for Tax on Sales/Purchases  
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In this step, you set the catch up contribution limits.

In line with the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), all employees aged 50 years or above from 2002 onwards, will be eligible for additional contribution limits. This additional limit is called the Catch-Up limit, and is an additional deferral contribution in excess of the standard annual deferral limit.

This new catch-up limit is applicable to 403(b), 401(k) and 457 plans only. However, SAP has provided an option to configure other plans.

Individuals aged 50 years and older will be allowed to make annual catch up contributions starting with $1,000 in 2002 and increasing to $5,000 in 2006 and thereafter.

The new contribution limits are as follows:

Year General Contribution Limit Catch up Contribution Limit
2002 $11,000 $12,000
2003 $12,000 $14,000
2004 $13,000 $16,000
2005 $14,000 $18,000
2006 $15,000 $20,000

1. A participant who is at least age 50 by the end of 2002 can effectively elect to defer up to $12,000 of his or her salary ($11,000 of regular salary and $1,000 of catch up contribution).
2. A participant who is at least age 50 by the end of 2006 will be able to defer up to $20,000 of his or her salary ($15,000 of regular salary and $5,000 catch up contribution).

1. Select/enter the plan you need to configure (for example, 401(k)).
2. Select Overview.
3. Delimit the validity period.
4. Set the age limit for eligibility.
5. Assign the relevant employee and employer wage types.

For more detailed information, see the following:

• IMG section Maintain constants for savings plans

• Note 0433406

TXBHW - Original Tax Base Amount in Local Currency   CPI1466 during Backup  
This documentation is copyright by SAP AG.

Length: 2169 Date: 20240523 Time: 184022     sap01-206 ( 34 ms )