Question

Simple IRA Roth Contributions in QB Online

Forum|Forum|1 year ago
September 19, 2024
11 replies
133 views

My understanding is that the Secure 2.0 Act allows ROTH contributions via Simple IRA. But I cannot figure out how to set this up in QB online. There is no way to select after tax contributions. I saw a post from earlier this year (January I think) saying that Simple IRAs don't have a ROTH option, but I don't think this is correct.

Workforce Payroll

A

Aldren18

QuickBooks Team

Your commitment to understanding the company contribution options in QuickBooks Online is commendable, Genissa. I'm here to provide you with the latest information regarding retirement plan contributions.

QuickBooks Online (QBO) does not support Roth contributions for SIMPLE IRAs introduced by the SECURE Act 2.0. However, it offers several other retirement plan options that you can set up for your employees, including:

401(k) / 401(k) catch-up
Simple 401(k) / Simple 401(k) catch-up
403(b) / 403(b) catch-up
SARSEP / SARSEP catch-up
After-tax Roth 401(k) / After-tax Roth 401(k) Catch-up
After-tax Roth 403(b)
Company-only plan
SIMPLE 401(k) / SIMPLE 401(k) Catch-up
SIMPLE IRA / SIMPLE IRA Catch-up

For comprehensive details on these retirement plans, I recommend checking out the article on how to set up or change a retirement plan in QuickBooks: Retirement plans in QBO.

Additionally, consider exploring third-party applications available for managing Roth contributions. This approach allows you to benefit from Roth SIMPLE IRAs while utilizing QuickBooks for payroll and accounting.

Furthermore, I've included these article that guides adding or changing employees' work locations in QBO Payroll to manage payroll and track your employee expenses. You can customize these reports to obtain the necessary information.

Keep this discussion handy for future questions about retirement plan setups in QBO Payroll. Our team is here to ensure you have the support you need, and we’re eager to assist you whenever needed.

C

Ca47

Does QBO still not support Roth contributions for Simple IRAs introduced by the SECURE Act 2.0?

C

Candice14

Level 8

Hey there, @Ca47.

Thanks for reaching out about Roth contributions for Simple IRAs in QuickBooks Online. I understand how helpful that feature would be for your business.

While we don't currently offer that specific option, QuickBooks Online does support several other retirement plans to help you manage your contributions:

401(k) / 401(k) catch-up
Simple 401(k) / Simple 401(k) catch-up
403(b) / 403(b) catch-up
SARSEP / SARSEP catch-up
After-tax Roth 401(k)
After-tax Roth 403(b)
Company-only plan
SIMPLE IRA / SIMPLE IRA Catch-up

You can learn more about these options here: Set up or change a retirement plan.

We're always looking for ways to improve. Remember you can share your feedback any time:

Go to the Gear icon and select Feedback.
Enter your comments or product suggestions.
Then select Next to submit feedback.

If you have any other questions, please don't hesitate to ask! Have a great Friday!

R

RF30

Unfortunately, Quickbooks staff have been providing the wrong information about SImple Roth IRA and stating that it is not allowed by the IRs. We already have a SIMPLE ROTH IRA account thru our broker but have not been able to use it for our employees. I have been calling support frequently and can not get someone to understand the situation. As of 3/25/25, there is no option in the deduction category for this.

In case anyone from the Quickbooks team is reading this , here is the information

https://www.capitalgroup.com/advisor/news/roth-employee-deferrals-simple-iras.html

M

MyPro CFO

I think it may help to separate what the IRS allows from what QuickBooks currently supports, because those are clearly getting conflated in this thread.

The IRS has already issued guidance confirming that Roth SIMPLE IRA and Roth SEP IRA employee salary deferrals are (not required but only) permitted under SECURE 2.0, and -- critically -- has also explained how they should be reported on Form W-2.

In FS-2024-18 (May 2024) and FS-2024-29 (August 2024), the IRS states that Roth-type employee deferrals to:

SIMPLE IRA are reported in Box 12 using code S
SEP IRA are reported in Box 12 using code F

These Roth deferrals are included in taxable wages (Boxes 1, 3, and 5), which is how they differ from traditional pre-tax contributions. There is no separate Box 12 code that distinguishes Roth vs. traditional for SIMPLE or SEP plans. Instead, being included in box 1 wages is the differentiator. The issue here does not appear to be IRS rules; it appears to be a lack of implementation and support within QuickBooks Online.

For QBO users specifically, there are currently two imperfect workarounds, neither of which produces a fully correct W-2:

Option 1: “Other after-tax deduction”

Employees → Edit payroll items
New payroll item → Deductions & contributions → Other deduction → Other after-tax deduction
Description includes “Roth SIMPLE” or "Roth SEP"
This reports the amount in Box 14 instead of Box 12 code S/F

Option 2: “After-tax Roth 401(k)”

This forces reporting to Box 12 code AA instead of Box 12 code S/F
Code AA is incorrect for SIMPLE IRAs and would mischaracterize the plan type

Between the two, Box 14 would seem less wrong than using Box 12 code AA. Showing both S/F and AA codes in box 12 in the same year could make it appear that the employer changed plan types mid-year, which may invite unnecessary questions even if not automatically disallowed.

Until QuickBooks adds native support for Roth-type after-tax SIMPLE or SEP IRA contributions, a reasonable interim approach may be:

Use Other after-tax deduction (Box 14) during the year
Revisit payroll setup 30–60 days before W-2 filing
If QuickBooks adds proper support by then, request a payroll correction
If not, leave Box 14 reporting rather than miscode Box 12

For those using QuickBooks Desktop Payroll, W-2 edits are more flexible. In QuickBooks Online Payroll, Box 12 editing is limited and may not allow correction to codes S or F even if the IRS guidance is clear.

In short:

The IRS has spoken. The gap here is QuickBooks product support and guidance and NOT tax law.

Relevant sources:

Cross posted to the following forum threads:

I

idezotl

I have submitted feedback requesting this feature inside the QBO app several times. Hopefully everyone else does this as well as posting on the forums.

I receive feedback regularly from employees about this and my only answer is Quickbooks doesn't allow this. Quickbooks has other features that are nice but what the employees will remember before long is the Quickbooks doesn't allow 'me' to benefit from SIMPLE ROTH IRA.

Please fix this.

Everyone else, please go to 'employees' section and in the upper right click "Give Feedback" and request the "feature of" a Simple Roth IRA. Thanks.

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