The IRS requires 401(k) contributions to be made before your compensation is paid, which means retroactive contribution elections are not permitted. This article explains why, and what alternatives may be available.
The Internal Revenue Service (IRS) requires that 401(k) employee contributions be made before the compensation is paid to you. This is why 401(k) deferrals are pulled directly from your paychecks — you cannot make retroactive contribution elections.
Deferrals from your pay can only be included for the year in which you got that pay. Because of these rules, you can set a deferral rate on pay you have not yet gotten, and for the current year only.
If you have an individual retirement account (IRA), you may be able to make contributions for a prior year in some cases. Learn more about IRA carryback contributions.
This information is intended to provide general information about Gusto 401(k) plan provisions. It is not intended to be tax or legal advice. If you have specific questions about your situation, consult your tax advisor.