Catch-up Contributions - Age 50 Requirement

[Guest nmh]

For purposes of determining when a Participant has attained age 50, do you use the calendar year or plan year? For example, assume the plan year is July 1, 2003 to June 30, 2004 and Participant A will attain age 50 on July 1, 2004.

According to IRS guidance, an individual will be deemed to have attained age 50 as of January 1 of the calendar year in which he actually attains age 50. So, in this scenario, Participant A will be deemed to have attained age 50 on January 1, 2004 (during the middle of the plan year). Therefore, may Participant A make catch-up contributions for the plan year ending June 30, 2004 or must he wait until the plan year in which he actually attains age 50?

[Archimage]

Catch-up contributions are based on a calendar year. You can reach your limit anytime in the year that you turn age 50. It has nothing to do with the plan year. The deferrals are reported on the w-2 which would let the IRS know whether or not you went over the limit.

[kocak]

Make sure to look at the document, I think some providers had age 50 by end of plan year to be eligible (even though the rule is calendar year).

Michele