Airline Pilot Central Forums - Profit Sharing Predictions

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Quote:

Originally Posted by APC225 (Post 2512027)

I want to avoid this so I'm trying to understand it. I understand the tax part of it. Certain deductions still come out, and when they do they are no longer pre tax sheltered, and therefore taxed as income. But I don’t understand how any of it can go in post tax PRAP unless that’s election box is marked. If someone elects 100% to go in pretax, and that would exceed the IRS max allowed, shouldn’t the rest just kick out directly to you via direct deposit or check?

I would think 99% of the people making enough to worry about this with our 6% are over 50 and have catch up. Most widebody CAs are over 50. It would take 400k in regular pay last year to hit $24,500 this year. And that’s before taxes are taken out.

Quote:

Originally Posted by UALinIAH (Post 2512046)

I wasn't sure if the other post meant that somehow money went to post tax prap even before the limit was reached. There seem to be two spillovers, to your checking account if the $24,500 limit is exceeded, and to RHA/VEBA if the total self+16% $55,000 limit is reached. I don’t see how any goes into post tax PRAP.

"If you elect to put more of your Profit Sharing payment into the 401(k) plan than the IRS allows, and you elect more than one contribution type, your Profit Sharing payment will be allocated first as Pre-Tax money, followed by Roth. Post-Tax is a contribution option, but only pilots that reached their 401(k) maximum by the February 16th paycheck will be eligible for Post-Tax contributions. Profit Sharing payments are not eligible for company B/C Plan contributions."

Quote:

Originally Posted by APC225 (Post 2512027)

Yes.
And as far as pre-tax vs post-tax PRAP, the pre-tax PRAP must be filled before a penny can go into post-tax PRAP.

So, when filling your PRAP, you MUST fill the pre-tax with $18,500 ($24,500 for 50+) before you can start having money go to post-tax PRAP.

If you elect to have your Profit Sharing to post-tax but have not filled pre-tax prior to distribution of Profit Sharing, you will get the Profit Sharing as a check. None of it will go to your PRAP. (I learned this last year)

Finally, answering your question, if you elect to use your Profit Sharing to finish filling up pre-tax, once it reaches $18,500/$24,500, the excess portion of your bonus will be distributed to you, as you thought.

If you go to the election page and read the post-tax election box, you'll see the second sentence says:
Please note, you may contribute 1-100% or a fixed dollar amount of your Profit Sharing payment on a post-tax basis ONLY IF you will have already contributed the maximum pre-tax and/or Roth 401(k) contribution for 2018 on a payroll check before your Profit Sharing payment is processed.

Thanks for the input.