Deferred Comp Insert 640
A variety of deferred compensation plans ranging from 401(k) to Simple IRA plans or 403(b) and 408(k)(6)/SEP IRA, or even 457(b) and 501(c)(18)(D) plans are being used to help save for retirement.
In addition, employees may elect a "Roth" alternative for several of these plan options.
While some of these "exempt" employee contributions from Federal and State Income Taxes, depending upon the specific state and plan, Roth alternatives are never exempted from FIT and SIT.
Then, of course, there's the question about how these plans are reported when the end of the year comes, and W-2 forms must be prepared and transmitted.
The chart below is intended to help you to review the elections of employees in terms of plan types, limits for employees ages 50 and less, or more than 50, as well as W-2 box codes.
As best as we can determine, as we publish this, the information in this table is current.
Of course, with the change in the Administration in Washington, D.C., we may see major tax code changes that could alter, increase or decrease any single aspect of this chart.
Be sure to review employee contribution limits for deferred compensation plans prior to the end of 2017, or at any time the tax codes or regulations my change during 2017.
Deferred Comp Table for 2017
Abbreviations used in the table above:
FIT – Federal Income Tax
SIT – State Income Tax
Footnotes used in the table above:
(A) –Depending upon state regulations and current IRS code provisions
(1) – IRS rules indicate that Roth 401(k) plans share the annual limit with a 401(k) plan
(2)– IRS rules indicated that Roth 403(b) plans share the annual limit with a 403(b) plan
(3) – IRS rules indicated that Roth 457(b) plans share the annual limit with a 457(b) plan
(4) - Special catch-up elections may apply for employees who have completed at least 15 years of service with a qualified organization. Such employees are eligible to contribute an additional $3,000 annually, bringing the limit to $21,000 for individuals of 50 years of age or less, and $27,000 for individuals of more than 50 years of age.
(5) – Special rules may apply depending upon the type of entity offering the 457(b) plan and how close the employee is to retirement
For additional information regarding limitations and related IRS code provisions, consult the IR-2015-118 (revised 30-September-2016).
DISCLAIMER: This article is for informational purposes only and does not constitute tax or retirement plan advice, if you need tax or retirement plan advice you should consult a tax or retirement planning professional. Always read and review any retirement plan or retirement plan perspective before taking any action related thereto, and consult a tax or retirement plan professional before entering into any retirement plan contract or other agreement.