📝 Overview
A Roth IRA is a retirement savings account funded with post-tax dollars, meaning qualified withdrawals in retirement are tax-free. This article covers what Roth IRAs are, supported state programs, and how to add a Roth IRA benefit for a worker.
🧠 What Is a Roth IRA?
A Roth IRA is a retirement savings account funded with money that has already been taxed. Because contributions are made with after-tax dollars, qualified withdrawals in retirement, including earnings, are tax-free.
Workers can contribute up to the annual IRS limit if they meet income eligibility requirements. A Roth IRA is separate from employer-sponsored plans like a 401(k), but it can be used alongside them to build additional retirement savings.
🔍 What Is a State-Sponsored Roth IRA?
A state-sponsored Roth IRA program is a retirement savings program created by some states for workers who don't have access to a retirement plan through their employer. These programs typically require certain employers to facilitate payroll deductions so workers can contribute to a Roth IRA.
Your role as the employer is to withhold the contributions and send payment directly to the state program. The program itself manages the accounts, investments, and worker enrollment.
Like a standard Roth IRA, contributions are made with post-tax dollars, and qualified withdrawals in retirement are tax-free. Workers can choose to participate or opt out, depending on the program's rules.
📍 State Programs
State-specific Roth IRA benefit types are supported for 15 states with active programs. These programs will display as a Roth IRA option automatically based on your work location.
Click the arrow to view the list of supported state programs
Click the arrow to view the list of supported state programs
State | Program Name |
California | |
Colorado | |
Connecticut | |
Delaware | |
Illinois | |
Maine | |
Maryland | |
Minnesota | |
Nevada | |
New Jersey | |
New York | |
Oregon | |
Rhode Island | |
Vermont | |
Virginia |
🛠️ Adding a Roth IRA
Click the arrow to view the process of adding a Roth IRA
Click the arrow to view the process of adding a Roth IRA
Navigate to the Profile tab
Locate the Benefits card and select Edit
Select Add benefit
In the Benefit category dropdown, select Retirement benefit
In the Benefit type dropdown, select the appropriate Roth IRA plan:
Roth IRA = Employer-sponsored plan
State IRA = State-sponsored programs
Fill in the remaining fields based on the plan or program
Select Save
❓ Frequently Asked Questions (FAQs)
Find answers to common questions or additional details that may not be covered in the main instructions.
Click the arrow to view frequently asked questions
Click the arrow to view frequently asked questions
What is the difference between the Roth IRA selection and the state-sponsored selections?
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Click the arrow to see the answer
Roth IRA is typically used for employer-sponsored plans. The state-sponsored options are built into the system to help you quickly identify and set up the correct contribution when applicable.
Are there annual contribution limits for Roth IRA contributions?
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Click the arrow to see the answer
Yes. Contribution limits are not automatically enforced in the system and will need to be entered manually when setting up the benefit.
Click the link below to find the most up-to-date annual limits on the IRS website.
Does payroll automatically remit contribution payments that are withheld?
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Click the arrow to see the answer
No. Contributions are deducted through payroll and recorded on worker pay stubs, but you are responsible for ensuring payments are made to each plan on the worker's behalf.