Originally Posted by
744ButtonPusher
Keep in mind that IF the retro is allowed to be contributed to your 401k it would still be subject to the individual contribution and/or 415c limits so if you are someone who already maxes out your stuff , you won’t be Able to contribute any of your retro.
note: the limits considered would be for the respective tax year, so 2020 retro for 2020 limits ect not the current year.
If it’s like Delta’s, it’s not back pay, but current year earnings, so taxable for the year in which it is paid and only eligible as elective contribution like any other pay.
The only thing you have to factor in is that the 2023 portion of the signing bonus is pensionable. So, if you normally plan on a certain amount to meet the 415c limit, you will have to make an adjustment.