FAQ 408: Budget--Profit sharing contribution to get maximum 415 catch-up contribution for principal


I am running the budget routine to design an integrated profit sharing allocation to get the principals to their 415 limit ($53000) and also take advantage of their full catch-up limit of $6000.

Two of the principals worked fine. They have deferral of $24000, I ran the 402(g) test, and $6000 was reclassified as catch-up. When I then run the budget routine, they receive the full profit sharing allcoation to their 415 limit, plus have the $6000 402(g) catch-up contribution.

One principal, who only deferred $8000, is not working out correctly. His profit sharing allocation is being stopped at the 415 limit of $53000, when I want it to allocate $6000 more and then reclassify that additional as 415 catch-up.


Go to the Limits screen of the principal and enter "59000" in his Over-ride 415 Limit field. The budget routine will then allocate additional profit sharing to the $46000 limit. After the budget is complete, run Reports-Compliance-415(c) to reclassify the $6000 as 415 catch-up. By the way, this is usually a very expensive way, in terms of staff cost, for a principal to get to their catch-up limit.