2025 SECURE 2.0 SIMPLE IRA Limit ($17,600) Triggers False Critical Diagnostic Ref #7862 — Override or Workaround?
Under SECURE 2.0 Act (Section 117), eligible small employers with 25 or fewer employees automatically qualify for a 10% increase in elective deferral limits. For tax year 2025, the standard SIMPLE IRA limit is $16,500, but for eligible small employers, the limit is $17,600 for taxpayers under age 50.
My Case:
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Tax Year: 2025
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Taxpayer: Age under 50
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Employer: 25 or fewer employees (eligible under SECURE 2.0)
- W-2 408(p) Deferral: $17,600 (the fully permissible 2025 limit for this employer size
Issue: The software is evaluating the W-2 against the standard $16,500 threshold instead of applying the SECURE 2.0 $17,600 limit. As a result, it triggers Critical Diagnostic Ref #7862, flagging an excess salary deferral of $1,100 ($17,600 – $16,500) and attempting to add it to taxable wages on Form 1040.
Since this is a valid contribution under current law, how can we suppress or clear this diagnostic without incorrectly increasing Schedule 1 / Form 1040 wages, or is a program update scheduled to support the 110% SECURE 2.0 limit for small employers?
