DaBest

My God; no wander the bean counters in Chicago can play this group anyway they want.

You can deferred entire PS to 401(k) at 100%! However, there are certain limitation:
Your Max 401(k) annual contribution is $18,000 (Retirement Topics - 401(k) and Profit-Sharing Plan Contribution Limits).
https://www.irs.gov/retirement-plans...ibution-limits
After $18K is reached, next step is carryover to RHA (VEBA) the max is $6650. (IRS Publication 969) https://www.irs.gov/pub/irs-pdf/p969.pdf
Furthermore; PS check is a subject to income tax for FED and State (about 30%); therefore, before the PS is deposited to your 401(k) and RHA (VIBA) your PS will have a tax deduction to sponsor your newly elected orange in chief president wet dream projects.
see IRS 1099R https://www.irs.gov/pub/irs-pdf/f1099r.pdf

To make it easy: Look at your PS check total:
Deduct your 1099R income tax (about 30%) this is not your ordinary income tax. (it's a bonus etc. distribution tax)
Deduct $18,000 for 401(k) limit
Deduct RHA VEBA limit ($6650 family) ($3350 single)
and if you still have some $ left...
1. You did very well in 2016 (must have been A380 CA)
2. The rest will be added to your Feb check and tax at ordinary income tax.
3. Contribute to back door IRA or regular IRA ($5500) (over 50 $6500)


Additional tips:
If you don't want your PS go to RHA VEBA (simply look at the amount that you already contributed to 401k + additional contribution in Feb 1st check
Deduct that from $18,000 and allocated just enough $ from PS to 410k)

Take the rest and pay for one year apartment of your second family in China or South America, or for striper school of your new 20 year old girlfriend.
If you still don't know what to do with it, just simply give it to me, since your are too stupid to deserve it anyway.

You are welcome...

Andy

Dude, that's so wrong that it's not even wrong (paraphrasing Wolfgang Pauli).

Maximum 401(k) is $18K for under 50. It's $24K for 50+.
Then the 415(c)(1) limit kicks in, which allows ANOTHER $36K (or a total of 100% of your compensation, whichever is less) to flow into your 401(k).

Sooo maximum annual 401k contributions are limited to $54K/$60K ($60K for 50+). That maximum includes company contributions to your 401k.

AFTER your 401k is maxed for the year, the excess 'spills' into your RHA VEBA. The ONLY money that can spill into your RHA VEBA is company contributions. YOU CANNOT MAKE DIRECT CONTRIBUTIONS TO RHA VEBA. If you hit the $54K/$60K max and still have money left over from PS, it will be paid to you - it does not flow into RHA VEBA.

Your comment for RHA VEBA limitations is incorrect. I had ~$18K spill into my RHA VEBA account in 2015. I will exceed that amount in 2016.

Flynn

For anyone who received profit sharing for the first time at United last year and took the entire amount home. What percentage was your net compared to the gross? Thanks

Andy

2015 Profit Sharing (PS) was paid in the 3/1/16 paycheck and wasn't separated from other pay. I suppose I could do a lot of math and give you an answer but I wouldn't vouch for the accuracy of it.
FWIW, I don't recall making a 401k election for my 2015 PS check but did have 100% pre-tax selected for the 3/1/16 paycheck. 100% of my pay, including the PS portion, flowed into my 401k (I got a $0 paycheck).

DaBest

You are right...

"The PRAP systems attempt to prevent any pilot from exceeding the 415 limit. However, if year-end testing confirms a participant did exceed the 415 limit, corrections will be made.
Any employer contributions in excess of the amount calculated above will be deposited in the RHA VEBA."
https://www.schwabplan.com

"the 415 limit for 401(k) plans for 2015 and 2016 is $53,000. Of this, employees may contribute up to $18,000, per the limits outlined in IRC section 402(g). The remaining $35,000 can be composed of employer contributions and matching or profit-sharing contributions"

https://www.irs.gov/uac/newsroom/irs...8-000-for-2016
P.S.
1st world problems...

APC225

Technically, we can't contribute directly, but practically, we can. We can forfeit vacation and have the cash value go straight into VEBA. It's allowed because, technically, we're forfeiting the vacation to the company, and then the company (not the individual) is putting it into VEBA. The IRS ruled that this was allowed, as described in an email. If a captain at the highest pay rate said "yes" and then forfeited 21 vacation days, $21,000 would go directly into VEBA. First officer, $15,000. If I understand this correctly, this method essentially bypasses and has no effect on the 415 limits. Max 401k + company 16% could still go to the $54k/$60k limit. It's too late to do this year as the decision had to be made by 31 Dec 2016.

Andy

Thanks for cleaning that up. I refrained from commenting on your original post on the subject, but am well aware of the limitations. Given all of the limitations, I wouldn't characterize it as a direct contribution - YMMV.

APC225

Thanks for your patience while I organized my thoughts and found the appropriate document to include. The contribution is not direct, nor can it be, as you said. But it is a way to get more cash into your VEBA without relying solely on spillover. Some folks who have decades left here and are quite a ways from getting into the spillover range could use this to drop a vacation week into VEBA occasionally if they have specific VEBA funding goals not achievable otherwise.

APC225

And the 2017 limits have changed. Max is $54k/$60k. From the R&I folks,

Chuck D

Do you know if the employee portion is still $18k?