Q4 2019 Product Update for Sage Abra Suite 9.2 and Sage HRMS 2017 is available on the Sage Knowledgebase today!

The update should be installed after all payments for 2019 have been posted and prior to starting 2020 payments.  Don't delay, check out the Release Bulletin to see what is new.

For 2020, the annual contribution limit for elective deferrals to a 401(k), 403(b), 457 or thrift savings plan is increasing $500 to $19,500.  If you are 50 or older, the 401(k) elective deferral limit is $26,000 in 2020. 

Question:  With all of the above in mind, where would you change the 401(k) annual contribution limit in Sage HRMS 2017?

Answer:  This is a two step process (read all of the steps before proceeding.  You should make a backup prior to making any changes).

Step 1 - Navigation Path:  Setup > (Codes) Payroll > Earning/Deduction Codes, Find the deduction.   On the Employee Tab, you will need to manually update the Annual Maximum Field.  Also review fields on all tabs to make sure the information is correct.

Step 2 - You can update the employees one by one on their Employee Payroll page > Pay tab, for the 'Employee Annual Maximum' field for the 401(k) deduction.  Also review Starts, Ends, and Calculate fields. For anyone contributing to 401(k), go to the Taxes tab, click USFIT, click Tax Info.. button.  Pension Plan value should be Yes to populate box 13 of the employee's W-2 for pension.

Note:  If you have a large amount of employees with 401(k), in step 2, instead of changing employees annual maximum one by one, go to Payroll > (Tasks) Update Earnings/Deductions.  Select your 401(k) deduction code.  Locate the Annual Maximum field.  Type of Change:  Replace.   New Value or Change:  19500.

Please note that there is more than one way to set up 401(k) deductions.  You may have one deduction code that handles the 19,500 and the catchup 26,000 by having the higher limit in the deduction code setup.  If this is the case, in the Setup of the Earning/Deduction Code the employee annual maximum would be 26,000.  At the employee level would be their individual caps, for example, Sally is 19,500, and Sam who is over 50, has $26,000.  The task to Update Earnings/Deductions can still be used.  You can create a selection list for the two groups, or Update by:  Set Criteria.  here you can filter by the employees birth date.

If this is the first time you will be updating a deduction limit, remember to do a backup and contact either Sage Support or your reseller for the method that best suits your situation.