Senator Orrin Hatch (R-UT) has dropped an amendment that would have altered the catch-up contribution rules on 401(k) plans for those 50 and older.
Because the Thrift Savings Plan is based on the same IRS rules governing contributions to 401(k) plans, the amendment would presumably have had the potential to also impact federal employees who contribute to the TSP who meet the same criteria.
Under current law, individuals 50 and older are allowed to make an additional $6,000 contribution to a 401(k) or the TSP in addition to the annual $18,000 limit (this will be increased to $18,500 in 2018).
The proposed amendment has gone through various changes on the way to being dropped entirely. Initially, it stated that the $6,000 catch-up contribution amount would be changed to require all catch-up contributions to only be Roth contributions. However, it would have increased the allowable amount of catch-up contributions to $9,000 per year.
Another document describing the amendment said catch-up contributions would be eliminated, but only for employees who earn $500,000 per year or more.
And now the proposal been eliminated entirely per yet another updated document released by the Senate Finance Committee.
The House today passed its tax reform bill and the Senate Finance Committee voted to advance the House tax bill late Thursday, likely putting the bill before the whole Senate in the next several days. Any bill that does happen to eventually become law is likely to continue to undergo numerous proposals and changes as it works its way through the legislative process.
