Department of the Treasury

Internal Revenue Service

Publication 571

(Rev. January 2024)

Cat. No. 46581C

Tax-Sheltered Annuity Plans (403(b) Plans)

For Employees of Public Schools and Certain Tax-Exempt Organizations

Jan 16, 2024

Future Developments

For the latest information about developments related to Pub. 571, such as legislation enacted after it was published, go to IRS.gov/Pub571.

What’s New for 2023

Retirement savings contributions credit. For 2023, the adjusted gross income limitations have increased from $68,000 to $73,000 for married filing jointly filers; from $51,000 to $54,750 for head of household filers; and from $34,000 to $36,500 for single, married filing separately, or qualifying surviving spouse with dependent child filers. See chapter﻿ ﻿10, Retirement Savings Contributions Credit (Saver's Credit), for additional information.

De minimis financial incentives. For plan years beginning after December 29, 2022, section 113 of the SECURE 2.0 Act of 2022 permits employers to offer their employees de minimis financial incentives if they make elective deferrals.

Limit on elective deferrals. For 2023, the limit on elective deferrals has increased from $20,500 to $22,500.

Limit on annual additions. For 2023, the limit on annual additions has increased from $61,000 to $66,000.

Designated Roth nonelective contributions. Section 604 of the SECURE 2.0 Act of 2022 permits certain nonelective contributions that are made after December 29, 2022, to be designated as Roth contributions.

What’s New for 2024

Retirement savings contributions credit. For 2024, the adjusted gross income limitations have increased from $73,000 to $76,500 for married filing jointly filers; from $54,750 to $57,375 for head of household filers; and from $36,500 to $38,250 for single, married filing separately, or qualifying surviving spouse with dependent child filers. See chapter﻿ ﻿10, Retirement Savings Contributions Credit (Saver's Credit), for additional information.

Limit on elective deferrals. For 2024, the limit on elective deferrals has increased from $22,500 to $23,000.

Limit on annual additions. For 2024, the limit on annual additions has increased from $66,000 to $69,000.

Distributions for emergency personal expenses. For distributions made after December 31, 2023, an emergency personal expense distribution may be made from a 403(b) plan and is not subject to the 10% additional tax on early distributions. An emergency personal expense distribution is a distribution made from your 403(b) plan (or other applicable eligible retirement plan) that is used for purposes of meeting unforeseeable or immediate financial needs relating to necessary personal for family emergency expenses. There are certain limits that apply for emergency personal expense distributions (one per calendar year, dollar limits of generally not more than $1,000, and limits on subsequent distributions). You may repay an emergency personal expense distributions at any time during the 3-year period beginning on the day after the date on which you received the distribution.

Distributions to a domestic abuse victim. For distributions made after December 31, 2023, a distribution to a domestic abuse victim may be made from a 403(b) plan and is not subject to the 10% additional tax on early distributions. A distribution to a domestic abuse victim is a distribution made from your 403(b) plan (or other applicable eligible retirement plan) that is no greater than $10,000 (indexed for inflation) and is made during the 1-year period beginning on any date on which you are the victim of domestic abuse by a spouse or domestic partner. You may repay this distribution at any time during the 3-year period beginning on the day after the date on which you received the distribution.

Reminders

Qualified disaster recovery distributions. A qualified disaster recovery distribution is a qualified disaster distribution that meets certain criteria as described in the SECURE 2.0 Act of 2022. It is a distribution made from an eligible retirement plan to an individual whose main home was in a qualified disaster area. You must have sustained an economic loss because of the disaster to receive distribution. For more information, see Pub. 575.

Repayment of qualified COVID-19 distributions. Generally, you may repay any portion of a qualified COVID-19 distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. You have 3 years from the day after the date you received a qualified COVID-19 distribution to make a repayment. The amount of your repayment can't be more than the amount of the original distribution. Amounts that are repaid are treated as a trustee-to-trustee transfer and are not included in income.

Income inclusion over 3-year period. You may choose to have qualified COVID-19 distributions included in income in equal amounts over 3 years. However, if you elect, you can include the entire distribution in your income in the year it was received.

More information. See Pubs. 575, 590-A, and 590-B for more information on new rules as a result of P.L. 116﻿-﻿136 that provide for tax-favored withdrawals, income inclusion, and repayments for individuals who were diagnosed with or suffered economic losses as a result of COVID-19.

Photographs of missing children. The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1﻿-﻿800-THE-LOST (1﻿-﻿800﻿-﻿843﻿-﻿5678) if you recognize a child.

Introduction

This publication can help you better understand the tax rules that apply to your 403(b) (tax-sheltered annuity) plan.

In this publication, you will find information to help you do the following.

Determine the maximum amount that can be contributed to your 403(b) account in 2024.

Determine the maximum amount that could have been contributed to your 403(b) account in 2023.

Identify excess contributions.

Understand the basic rules for claiming the retirement savings contributions credit.

Understand the basic rules for distributions and rollovers from 403(b) accounts.

This publication doesn’t provide specific information on the following topics.

Distributions from 403(b) accounts. This is covered in Pub. 575, Pension and Annuity Income.

Rollovers. This is covered in Pub. 590-A, Contributions to Individual Retirement Arrangements (IRAs), and Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs).

How to use this publication.

This publication is organized into chapters to help you find information easily.

Chapter 1 answers questions frequently asked by 403(b) plan participants.

Chapters 2 through 6 explain the rules and terms you need to know to figure the maximum amount that could have been contributed to your 403(b) account for 2023 and the maximum amount that can be contributed to your 403(b) account in 2024.

Chapter 7 provides general information on the prevention and correction of excess contributions to your 403(b) account.

Chapter 8 provides general information on distributions, transfers, and rollovers.

Chapter 9 provides blank worksheets that you will need to accurately and actively participate in your 403(b) plan. Filled-in samples of most of these worksheets can be found throughout this publication.

Chapter 10 explains the rules for claiming the retirement savings contributions credit (saver's credit).

Comments and suggestions.

We welcome your comments about this publication and suggestions for future editions.

You can send us comments through IRS.gov/FormComments. Or, you can write to the Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.

Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments and suggestions as we revise our tax forms, instructions, and publications. Don’t send tax questions, tax returns, or payments to the above address.

Getting answers to your tax questions.

If you have a tax question not answered by this publication or the How To Get Tax Help section at the end of this publication, go to the IRS Interactive Tax Assistant page at IRS.gov/Help/ITA where you can find topics by using the search feature or by viewing the categories listed.

Getting tax forms, instructions, and publications.

Go to IRS.gov/Forms to download current and prior-year forms, instructions, and publications.

Ordering tax forms, instructions, and publications.

Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800﻿-﻿829﻿-﻿3676 to order prior-year forms and instructions. The IRS will process your order for forms and publications as soon as possible. Don’t resubmit requests you've already sent us. You can get forms and publications faster online.

Useful Items

You may want to see:

Publication

﻿ ﻿517﻿ ﻿Social Security and Other Information for Members of the Clergy and Religious Workers

﻿ ﻿575﻿ ﻿Pension and Annuity Income

﻿ ﻿590-A﻿ ﻿Contributions to Individual Retirement Arrangements (IRAs)

﻿ ﻿590-B﻿ ﻿Distributions from Individual Retirement Arrangements (IRAs)

Form (and Instructions)

﻿ ﻿W-2﻿ ﻿Wage and Tax Statement

﻿ ﻿1099-R﻿ ﻿Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

﻿ ﻿5329﻿ ﻿Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts

﻿ ﻿5330﻿ ﻿Return of Excise Taxes Related to Employee Benefit Plans

﻿ ﻿8880﻿ ﻿Credit for Qualified Retirement Savings Contributions

1.

403(b) Plan Basics

This chapter introduces you to 403(b) plans and accounts. Specifically, the chapter answers the following questions.

What is a 403(b) plan?

What are the benefits of contributing to a 403(b) plan?

Who can participate in a 403(b) plan?

Who can set up a 403(b) account?

How can contributions be made to my 403(b) account?

Do I report contributions on my tax return?

How much can be contributed to my 403(b) account?

What Is a 403(b) Plan?

A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers.

Individual accounts in a 403(b) plan can be any of the following types.

An annuity contract, which is a contract provided through an insurance company.

A custodial account, which is an account invested in mutual funds.

A retirement income account set up for church employees. Generally, retirement income accounts can invest in either annuities or mutual funds.

We use the term “403(b) account” to refer to any one of these funding arrangements throughout this publication, unless otherwise specified.

What Are the Benefits of Contributing to a 403(b) Plan?

There are three benefits to contributing to a 403(b) plan.

The first benefit is that you don’t pay income tax on allowable contributions until you begin making withdrawals from the plan, usually after you retire. Allowable contributions to a 403(b) plan are either excluded or deducted from your income. However, if your contributions are made to a Roth contribution program, this benefit doesn’t apply. Instead, you pay income tax on the contributions to the plan but distributions from the plan (if certain requirements are met) are tax free.

Note. Generally, employees must pay social security and Medicare tax on their contributions to a 403(b) plan, including those made under a salary reduction agreement. See chapter﻿ ﻿4, Limit on Elective Deferrals, for more information.

The second benefit is that earnings and gains on amounts in your 403(b) account aren’t taxed until you withdraw them. Earnings and gains on amounts in a Roth contribution program aren’t taxed if your withdrawals are qualified distributions. Otherwise, they are taxed when you withdraw them.

The third benefit is that you may be eligible to take a credit for elective deferrals contributed to your 403(b) account. See chapter﻿ ﻿10,  Retirement Savings Contributions Credit (Saver's Credit), for more information.

Excluded.

If an amount is excluded from your income, it isn’t included in your total wages on your Form W-2. This means that you don’t report the excluded amount on your tax return.

Deducted.

If an amount is deducted from your income, it is included with your other wages on your Form W-2. You report this amount on your tax return, but you are allowed to subtract it when figuring the amount of income on which you must pay tax.

Who Can Participate in a 403(b) Plan?

Any eligible employee can participate in a 403(b) plan.

Eligible employees.

The following employees are eligible to participate in a 403(b) plan.

Employees of tax-exempt organizations established under section 501(c)(3). These organizations are usually referred to as “section 501(c)(3) organizations” or simply “501(c)(3) organizations.”

Employees of public school systems who are involved in the day-to-day operations of a school.

Employees of cooperative hospital service organizations.

Civilian faculty and staff of the Uniformed Services University of the Health Sciences.

Employees of public school systems organized by Indian tribal governments who are involved in the day-to-day operations of a school.

Certain ministers (explained next).

Ministers.

The following ministers are eligible employees for whom a 403(b) account can be established.

Ministers employed by section 501(c)(3) organizations.

Self-employed ministers. A self-employed minister is treated as employed by a tax-exempt organization that is an eligible employer.

Ministers (chaplains) who meet both of the following requirements.

They are employed by organizations that aren’t section 501(c)(3) organizations.

They function as ministers in their day-to-day professional responsibilities with their employers.

Throughout this publication, the term “chaplain” will be used to mean ministers described in the third category in the list above.

Example. A minister employed as a chaplain by a state-run prison and a chaplain in the U.S. Armed Forces are eligible employees because their employers aren’t section 501(c)(3) organizations and they are employed as ministers.

Universal availability.

Generally, all eligible employees (with certain exceptions) of an employer must be permitted to make elective deferrals (including Roth elective deferrals) if any employee of the employer may make elective deferrals. If your employer offers a 403(b) plan, you should have received information about your eligibility to participate.

Who Can Set up a 403(b) Account?

You can’t set up your own 403(b) account. Only employers can set up 403(b) accounts. A self-employed minister can’t set up a 403(b) account for its own benefit. If you are a self-employed minister, only the organization (denomination) with which you are associated can set up an account for your benefit.

How Can Contributions Be Made to My 403(b) Account?

Generally, only your employer can make contributions to your 403(b) account. However, some plans will allow you to make after-tax contributions (defined below).

The following types of contributions can be made to 403(b) accounts.

Elective deferrals. These are contributions made under a salary reduction agreement. This agreement allows your employer to withhold money from your paycheck to be contributed directly into a 403(b) account for your benefit. Except for Roth contributions, you don’t pay income tax on these contributions until you withdraw them from the account. If your contributions are Roth contributions, you pay taxes on your contributions but any qualified distributions from your Roth account are tax free.

Nonelective contributions. These are employer contributions that aren’t made under a salary reduction agreement. Nonelective contributions include matching contributions, discretionary contributions, and mandatory contributions made by your employer. Except for Roth nonelective contributions, you don't pay income tax on these contributions until you withdraw them from the account. If your nonelective contributions are designated as Roth contributions, you pay taxes on your contributions, but any qualified distributions from your Roth account are tax free.

After-tax contributions. These are contributions (that aren’t Roth contributions) you make with funds that you must include in income on your tax return. A salary payment on which income tax has been withheld is a source of these contributions. If your plan allows you to make after-tax contributions, they aren’t excluded from income and you can’t deduct them on your tax return.

A combination of any of the three contribution types listed above.

Self-employed minister.

If you are a self-employed minister, you are considered both an employee and an employer, and you can contribute to a retirement income account for your own benefit.

Do I Report Contributions on My Tax Return?

Generally, you don’t report contributions to your 403(b) account (except Roth contributions) on your tax return. Your employer will report contributions on your 2023 Form W-2. Elective deferrals will be shown in box 12 with code E for pre-tax amounts and code BB for Roth amounts, and the Retirement plan box will be checked in box 13. If you are a self-employed minister or chaplain, see the discussions next.

Self-employed ministers.

If you are a self-employed minister, you must report the total contributions as a deduction on your tax return. Deduct your contributions on line﻿ ﻿16 of the 2023 Schedule 1 (Form 1040).

Chaplains.

If you are a chaplain and your employer doesn’t exclude contributions made to your 403(b) account from your earned income, you may be able to take a deduction for those contributions on your tax return.

 However, if your employer has agreed to exclude the contributions from your earned income, you won’t be allowed a deduction on your tax return.

If you can take a deduction, include your contributions on line 24g of the 2023 Schedule 1 (Form 1040).

How Much Can Be Contributed to My 403(b) Account?

There are limits on the amount of contributions that can be made to your 403(b) account each year. If contributions made to your 403(b) account are more than these contribution limits, penalties may apply.

Chapters 2 through 6 provide information on how to determine the amount that can be contributed to your 403(b) account.

Worksheets are provided in chapter﻿ ﻿9 to help you determine the maximum amount that can be contributed to your 403(b) account each year. Chapter 7, Excess Contributions, describes how to prevent excess contributions and how to get an excess contribution corrected.

2.

Maximum Amount Contributable (MAC)

Throughout this publication, the limit on the amount that can be contributed to your 403(b) account for any year is referred to as your maximum amount contributable (MAC). This chapter:

Introduces the components of your MAC,

Tells you how to figure your MAC, and

Tells you when to figure your MAC.

Components of Your MAC

Generally, before you can determine your MAC, you must first figure the components of your MAC. The components of your MAC are:

The limit on annual additions (chapter﻿ ﻿3), and

The limit on elective deferrals (chapter﻿ ﻿4).

How Do I Figure My MAC?

Generally, contributions to your 403(b) account are limited to the lesser of:

The limit on annual additions, or

The limit on elective deferrals.

Depending upon the type of contributions made to your 403(b) account, only one of the limits may apply to you.

Which limit applies.

Whether you must apply one or both of the limits depends on the type of contributions made to your 403(b) account during the year.

Elective deferrals only.

If the only contributions made to your 403(b) account during the year were elective deferrals made under a salary reduction agreement, you will need to figure both of the limits. Your MAC is the lesser of the two limits.

Nonelective contributions only.

If the only contributions made to your 403(b) account during the year were nonelective contributions (employer contributions not made under a salary reduction agreement), you will only need to figure the limit on annual additions. Your MAC is the limit on annual additions.

Elective deferrals and nonelective contributions.

If the contributions made to your 403(b) account were a combination of both elective deferrals made under a salary reduction agreement and nonelective contributions (employer contributions not made under a salary reduction agreement), you will need to figure both limits. Your MAC is the limit on the annual additions.

Catch-up contributions.

If you are age 50 or older, you may be able to make additional catch-up contributions, which are explained in chapter﻿ ﻿6.

You need to figure the limit on elective deferrals to determine if you have excess elective deferrals, which are explained in chapter﻿ ﻿7.

Worksheets.

Worksheets are available in chapter﻿ ﻿9 to help you figure your MAC.

When Should I Figure My MAC?

At the beginning of 2024, you should refigure your 2023 MAC based on your actual compensation for 2023. This will allow you to determine if the amount that has been contributed to your 403(b) account for 2023 has exceeded the allowable limits. In some cases, this will allow you to avoid penalties and additional taxes. See chapter﻿ ﻿7.

Generally, you should figure your MAC for the current year at the beginning of each tax year using a conservative estimate of your compensation. If your compensation changes during the year, you should refigure your MAC based on a revised conservative estimate. By doing this, you will be able to determine if contributions to your 403(b) account can be increased or should be decreased for the year.

3.

Limit on Annual Additions

The first component of MAC is the limit on annual additions. This is a limit on the total contributions (elective deferrals, nonelective contributions, and after-tax contributions) that can be made to your 403(b) account. The limit on annual additions is generally the lesser of:

$66,000 for 2023 and $69,000 for 2024, or

100% of your includible compensation for your most recent year of service.

More than one 403(b) account. If you contributed to more than one 403(b) account, you must combine the contributions made to all 403(b) accounts maintained by your employer. If you participate in more than one 403(b) plan maintained by different employers, you don’t need to combine amounts for annual addition limits.

Ministers and church employees.

If you are a minister or a church employee, you may be able to increase your limit on annual additions or use different rules when figuring your limit on annual additions. For more information, see chapter﻿ ﻿5.

Participation in a qualified plan.

If you participated in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a qualified plan and simplified employee pensions of all corporations, partnerships, and sole proprietorships in which you have more than 50% control to determine the total annual additions.

You can use Part I of Worksheet 1 in chapter﻿ ﻿9 to figure your limit on annual additions.

Includible Compensation for Your Most Recent Year of Service

Definition.

Generally, includible compensation for your most recent year of service is the amount of taxable wages and benefits you received from the employer that maintained a 403(b) account for your benefit during your most recent year of service.

When figuring your includible compensation for your most recent year of service, keep in mind that your most recent year of service may not be the same as your employer's most recent annual work period. This can happen if your tax year isn’t the same as your employer's annual work period.

When figuring includible compensation for your most recent year of service, don’t mix compensation or service of one employer with compensation or service of another employer.

Most Recent Year of Service

Your most recent year of service is your last full year of service, ending on the last day of your tax year that you worked for the employer that maintained a 403(b) account on your behalf.

Tax year different from employer's annual work period.

If your tax year isn’t the same as your employer's annual work period, your most recent year of service is made up of parts of at least two of your employer's annual work periods.

Example. A professor who reports income on a calendar-year basis is employed on a full-time basis by a university that operates on an academic year (October through May). To figure the includible compensation for 2023, the professor's most recent year of service is from January through May 2023 and from October through December 2023.

Figuring Your Most Recent Year of Service

To figure your most recent year of service, begin by determining what is a full year of service for your position. A full year of service is equal to full-time employment for your employer's annual work period.

After identifying a full year of service, begin counting the service you have provided for your employer starting with the service provided in the current year.

Part-time or employed only part of the year.

If you are a part-time or a full-time employee who is employed for only part of the year, your most recent year of service is your service this year and your service for as many previous years as is necessary to total 1 full year of service. To determine your most recent year of service, add the following periods of service.

Your service during the year for which you are figuring the limit on annual additions.

Your service during your preceding tax years until the total service equals 1 year of service or you have figured all of your service with the employer.

Example. You were employed on a full-time basis from July through December 2021 (1/2 year of service), July through December 2022 (1/2 year of service), and October through December 2023 (1/4 year of service). Your most recent year of service for figuring your limit on annual additions for 2023 is the total of your service during 2023 (1/4 year of service), your service during 2022 (1/2 year of service), and your service during the months of October through December 2021 (1/4 year of service).

Not yet employed for 1 year.

If, at the close of the year, you haven’t yet worked for your employer for 1 year (including time you worked for the same employer in all earlier years), use the period of time you have worked for the employer as your most recent year of service.

Includible Compensation

After identifying your most recent year of service, the next step is to identify the includible compensation associated with that full year of service.

Includible compensation isn’t the same as income included on your tax return. Compensation is a combination of income and benefits received in exchange for services provided to your employer.

Generally, includible compensation is the amount of income and benefits:

Received from the employer who maintains your 403(b) account, and

It must be included in your income.

Includible compensation includes the following amounts.

Elective deferrals (employer's contributions made on your behalf under a salary reduction agreement).

Amounts contributed or deferred by your employer under a section 125 cafeteria plan.

Amounts contributed or deferred, at the election of the employee, under an eligible section 457 nonqualified deferred compensation plan (state or local government or tax-exempt organization plan). Note. For information about treating elective deferrals under section 457 plans as Roth contributions, see Pub. 575.

Wages, salaries, and fees for personal services earned with the employer maintaining your 403(b) account.

Income otherwise excluded under the foreign earned income exclusion.

Pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan.

Includible compensation does not include the following items.

Your employer's contributions to your 403(b) account.

Compensation earned while your employer wasn’t an eligible employer.

Your employer's contributions to a qualified plan that:

Are on your behalf, and

Are excludable from income.

The cost of incidental life insurance. See Cost of Incidental Life Insurance, later.

If you are a church employee or a foreign missionary, figure includible compensation using the rules explained in chapter﻿ ﻿5.

Contributions after retirement.

Nonelective contributions may be made for an employee for up to 5 years after retirement. These contributions would be based on includible compensation for the last year of service before retirement.

Cost of Incidental Life Insurance

Includible compensation doesn’t include the cost of incidental life insurance.

If all of your 403(b) accounts invest only in mutual funds, then you have no incidental life insurance.

If you have an annuity contract, a portion of the cost of that contract may be for incidental life insurance. If so, the cost of the insurance is taxable to you in the year contributed and is considered part of your basis when distributed. Your employer will include the cost of your insurance as taxable wages in box 1 of Form W-2.

Not all annuity contracts include life insurance. Contact your plan administrator to determine if your contract includes incidental life insurance. If it does, you will need to figure the cost of life insurance each year the policy is in effect.

Figuring the cost of incidental life insurance.If you have determined that part of the cost of your annuity contract is for an incidental life insurance premium, you will need to determine the amount of the premium and subtract it from your includible compensation.

To determine the amount of the life insurance premiums, you will need to know the following information.

The value of your life insurance contract, which is the amount payable upon your death.

The cash value of your life insurance contract at the end of the tax year.

Your age on your birthday nearest the beginning of the policy year.

Your current life insurance protection under an ordinary retirement income life insurance policy, which is the amount payable upon your death minus the cash value of the contract at the end of the year.

You can use Worksheet A in chapter﻿ ﻿9 to determine the cost of your incidental life insurance.

Example. Your new contract provides that your beneficiary will receive $10,000 if you should die before retirement. Your cash value in the contract at the end of the first year is zero. Your current life insurance protection for the first year is $10,000 ($10,000 − $0).

The cash value in the contract at the end of year 2 is $1,000, and the current life insurance protection for the second year is $9,000 ($10,000 – $1,000).

The 1-year cost of the protection can be calculated by using Figure 3﻿-﻿1. The premium rate is determined based on your age on your birthday nearest the beginning of the policy year.

Figure 3﻿-﻿1. Table of 1-Year Term Premiums for $1,000 Life Insurance Protection

Age

Cost

Age

Cost

Age

Cost

0

$0.70

35

$0.99

70

$20.62

1

0.41

36

1.01

71

22.72

2

0.27

37

1.04

72

25.07

3

0.19

38

1.06

73

27.57

4

0.13

39

1.07

74

30.18

5

0.13

40

1.10

75

33.05

6

0.14

41

1.13

76

36.33

7

0.15

42

1.20

77

40.17

8

0.16

43

1.29

78

44.33

9

0.16

44

1.40

79

49.23

10

0.16

45

1.53

80

54.56

11

0.19

46

1.67

81

60.51

12

0.24

47

1.83

82

66.74

13

0.28

48

1.98

83

73.07

14

0.33

49

2.13

84

80.35

15

0.38

50

2.30

85

88.76

16

0.52

51

2.52

86

99.16

17

0.57

52

2.81

87

110.40

18

0.59

53

3.20

88

121.85

19

0.61

54

3.65

89

133.40

20

0.62

55

4.15

90

144.30

21

0.62

56

4.68

91

155.80

22

0.64

57

5.20

92

168.75

23

0.66

58

5.66

93

186.44

24

0.68

59

6.06

94

206.70

25

0.71

60

6.51

95

228.35

26

0.73

61

7.11

96

250.01

27

0.76

62

7.96

97

265.09

28

0.80

63

9.08

98

270.11

29

0.83

64

10.41

99

281.05

30

0.87

65

11.90

31

0.90

66

13.51

32

0.93

67

15.20

33

0.96

68

16.92

34

0.98

69

18.70

If the current published premium rates per $1,000 of insurance protection charged by an insurer for individual 1-year term life insurance premiums available to all standard risks are lower than those in the preceding table, you can use the lower rates for figuring the cost of insurance in connection with individual policies issued by the same insurer.

Example 1. An employee, age 44, and the employer enter into a 403(b) plan that will provide the employee with a $500 a month annuity upon retirement at age 65. The agreement also provides that if the employee should die before retirement, the beneficiary will receive the greater of $20,000 or the cash surrender value in the life insurance contract. Using the facts presented, we can determine the cost of the employee’s life insurance protection as shown in Table 3﻿-﻿1.

The employer has included $28 for the cost of the life insurance protection in the employee’s current year income. When figuring includible compensation for this year, the employee will subtract $28.

T﻿a﻿b﻿l﻿e﻿ ﻿3﻿-﻿1﻿.

Worksheet A. Cost of Incidental Life Insurance

N﻿o﻿t﻿e﻿.

Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. This amount will be used to figure includible compensation for your most recent year of service.

1.

Enter the value of the contract (amount payable upon your death)

1.

 $20,000.00

2.

Enter the cash value in the contract at the end of the year

2.

0.00

3.

Subtract line﻿ ﻿2 from line﻿ ﻿1. This is the value of your current life insurance protection

3.

 $20,000.00

4.

Enter your age on your birthday nearest the beginning of the policy year

4.

44

5.

Enter the 1-year term premium for $1,000 of life insurance based on your age. (From Figure 3﻿-﻿1)

5.

$1.40

6.

Divide line﻿ ﻿3 by $1,000

6.

20

7.

Multiply line﻿ ﻿6 by line﻿ ﻿5. This is the cost of your incidental life insurance

7.

$28.00

Example 2. The employee’s cash value in the contract at the end of the second year is $1,000. In year 2, the cost of the employee’s life insurance is figured as shown in Table 3﻿-﻿2.

In year 2, the employer will include $29.07 in the employee’s current year income. The employee will subtract this amount when figuring the includible compensation.

T﻿a﻿b﻿l﻿e﻿ ﻿3﻿-﻿2﻿.

Worksheet A. Cost of Incidental Life Insurance

N﻿o﻿t﻿e﻿.

Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. This amount will be used to figure includible compensation for your most recent year of service.

1.

Enter the value of the contract (amount payable upon your death)

1.

$20,000.00

2.

Enter the cash value in the contract at the end of the year

2.

$1,000.00

3.

Subtract line﻿ ﻿2 from line﻿ ﻿1. This is the value of your current life insurance protection

3.

$19,000.00

4.

Enter your age on your birthday nearest the beginning of the policy year

4.

45

5.

Enter the 1-year term premium for $1,000 of life insurance based on your age. (From Figure 3﻿-﻿1)

5.

$1.53

6.

Divide line﻿ ﻿3 by $1,000

6.

19

7.

Multiply line﻿ ﻿6 by line﻿ ﻿5. This is the cost of your incidental life insurance

7.

$29.07

Figuring Includible Compensation for Your Most Recent Year of Service

You can use Worksheet B in chapter﻿ ﻿9 to determine your includible compensation for your most recent year of service.

Example. Max has been periodically working full-time for a local hospital since September 2021. Max needs to figure the limit on annual additions for 2024. The hospital's normal annual work period for employees in Max's general type of work runs from January to December.

During the periods that Max was employed with the hospital, the hospital has always been eligible to provide a 403(b) plan to employees. Additionally, the hospital has never provided the employees with a 457 deferred compensation plan, a transportation fringe benefit plan, or a cafeteria plan.

Max has never worked abroad and there is no life insurance provided under the plan.

Table 3﻿-﻿3 shows the service Max provided to the employer, compensation for the periods worked, elective deferrals, and taxable wages.

T﻿a﻿b﻿l﻿e﻿ ﻿3﻿-﻿3﻿.

Max’s Compensation

N﻿o﻿t﻿e﻿.

This table shows information Max will use to figure includible compensation for the most recent year of service.

Year

Years of Service

Taxable Wages

Elective Deferrals

2024

6/12 of
a year

$42,000

$2,000

2023

4/12 of
a year

$16,000

$1,650

2022

4/12 of
a year

$16,000

$1,650

Before figuring the limit on annual additions, Max must figure includible compensation for the most recent year of service.

Because Max isn’t planning to work the entire 2024 year, Max’s most recent year of service will include the time planning to work in 2024 plus time worked in the preceding 3 years until the time worked for the hospital totals 1 year. If the total time worked is less than 1 year, Max will treat it as if it were 1 year. Max figures the most recent year of service shown in the following list.

Time Max will work in 2024 is ﻿ ﻿6﻿/﻿12 of a year.

Time worked in 2023 is ﻿ ﻿4﻿/﻿12 of a year. All of this time will be used to determine Max's most recent year of service.

Time worked in 2022 is ﻿ ﻿4﻿/﻿12 of a year. Max only needs 2 months of the 4 months worked in 2022 to have enough time to total 1 full year. Because Max needs only ﻿ ﻿1﻿/﻿2 of the actual time worked, Max will use only ﻿ ﻿1﻿/﻿2 of income earned during that period to figure wages that will be used in figuring the includible compensation.

Using the information provided in Table 3﻿-﻿3, wages for Max's most recent year of service are $66,000 ($42,000 + $16,000 + $8,000). Max’s includible compensation for the most recent year of service is figured as shown in Table 3﻿-﻿4.

After figuring the includible compensation, Max determines the limit on annual additions for 2024 to be $69,000, the lesser of the includible compensation, $70,475 (Table 3﻿-﻿4), and the maximum amount of $69,000.

T﻿a﻿b﻿l﻿e﻿ ﻿3﻿-﻿4﻿.

Worksheet B. Includible Compensation for Your Most Recent Year of Service¹

N﻿o﻿t﻿e﻿.

Use this worksheet to figure includible compensation for your most recent year of service.

1.

Enter your includible wages from the employer maintaining your 403(b) account for your most recent year of service

1.

$66,000

2.

Enter elective deferrals excluded from your gross income for your most recent year of service²

2.

 4,475³

3.

Enter amounts contributed or deferred by your employer under a cafeteria plan for your most recent year of service

3.

-0-

4.

Enter amounts contributed or deferred by your employer according to your election to your 457 account (a nonqualified plan of a state or local government or of a tax-exempt organization) for your most recent year of service

4.

-0-

5.

Enter pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan for your most recent year of service

5.

-0-

6.

Enter your foreign earned income exclusion for your most recent year of service

6.

-0-

7.

Add lines 1, 2, 3, 4, 5, and 6

7.

70,475

8.

Enter the cost of incidental life insurance that is part of your annuity contract for your most recent year of service

8.

-0-

9.

Enter compensation that was both:

Earned during your most recent year of service, and

Earned while your employer wasn’t qualified to maintain a 403(b) plan

9.

-0-

10.

Add lines 8 and 9

10.

-0-

11.

Subtract line﻿ ﻿10 from line﻿ ﻿7. This is your includible compensation for your most recent year of service

11.

70,475

¹ Use estimated amounts if figuring includible compensation before the end of the year.

² Elective deferrals made to a designated Roth account aren’t excluded from your gross income and shouldn’t be included on this line.
³ $4,475 ($2,000 + $1,650 + $825).

4.

Limit on Elective Deferrals

The second and final component of MAC is the limit on elective deferrals. This is a limit on the amount of contributions that can be made to your account through a salary reduction agreement.

A salary reduction agreement is an agreement between you and your employer that allows for a portion of your compensation to be directly invested in a 403(b) account on your behalf. You can enter into more than one salary reduction agreement during a year.

More than one 403(b) account.If, for any year, elective deferrals are contributed to more than one 403(b) account for you (whether or not with the same employer), you must combine all the elective deferrals to determine whether the total is more than the limit for that year.

403(b) plan and another retirement plan.If, during the year, contributions in the form of elective deferrals are made to other retirement plans on your behalf, you must combine all of the elective deferrals to determine if they are more than your limit on elective deferrals. The limit on elective deferrals applies to amounts contributed to:

401(k) plans, to the extent excluded from income;

Roth contribution programs;

Section 501(c)(18) plans, to the extent excluded from income;

Savings incentive match plan for employees (SIMPLE) plans;

Salary reduction simplified employee pension (SARSEP) plans; and

All 403(b) plans.

Roth contribution program.

Your 403(b) plan may allow you to designate all or a portion of your elective deferrals as Roth contributions. Elective deferrals designated as Roth contributions must be maintained in a separate Roth account and aren’t excludable from your gross income.

The maximum amount of contributions allowed under a Roth contribution program is your limit on elective deferrals, less your elective deferrals not designated as Roth contributions. For more information on the Roth contribution program, see Pub. 560, Retirement Plans for Small Business.

Excess elective deferrals.

If the amount contributed is more than the allowable limit, you must include the excess that isn’t a Roth contribution in your gross income for the year contributed.

General Limit

Under the general limit on elective deferrals, the most that can be contributed to your 403(b) account through a salary reduction agreement is $22,500 for 2023 and $23,000 for 2024. This limit applies without regard to community property laws.

15-Year Rule

If you have at least 15 years of service with an educational organization (such as a public or private school), hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization) and it is allowed by the terms of the plan document, the limit on elective deferrals to your 403(b) account is increased by the least of:

$3,000;

$15,000, reduced by the sum of:

The additional pre-tax elective deferrals made in prior years because of this rule, plus

The aggregate amount of designated Roth contributions permitted for prior years because of this rule; or

$5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years.

If you qualify for the 15-year rule (sometimes referred to as the “special section 403(b) catch-up” or the “years-of-service catch-up”), your elective deferrals under this limit can be as high as $25,500 for 2023 and $26,000 for 2024.

To determine whether you have 15 years of service with your employer, see Years of Service, next.

Years of Service

To determine if you are eligible for the increased limit on elective deferrals, you will first need to figure your years of service. How you figure your years of service depends on whether you were a full-time or a part-time employee, whether you worked for the full year or only part of the year, and whether you have worked for your employer for an entire year.

You must figure years of service for each year during which you worked for the employer who is maintaining your 403(b) account.

If more than one employer maintains a 403(b) account for you in the same year, you must figure years of service separately for each employer.

For purposes of the 15-year rule, years of service are figured through the year for which the calculation is being made. For example, to determine the limit for 2022, you count years of service through 2023.

Definition

Your years of service are the total number of years you have worked as a full-time employee for the employer maintaining your 403(b) account as of the end of the year.

Figuring Your Years of Service

Take the following rules into account when figuring your years of service.

Status of employer.

Your years of service include only periods during which your employer was an eligible employer. Your plan administrator can tell you whether or not your employer was qualified during all your periods of service.

Service with one employer.

Generally, you can’t count service for any employer other than the one who maintains your 403(b) account.

Church employee.

If you are a church employee, treat all of your years of service with related church organizations as years of service with the same employer. For more information about church employees, see chapter﻿ ﻿5.

Self-employed ministers.

If you are a self-employed minister, your years of service include full and part years in which you have been treated as employed by a tax-exempt organization that is an eligible employer.

Total years of service.

When figuring prior years of service, figure each year individually and then add the individual years of service to determine your total years of service.

Example. The annual work period for full-time teachers employed by ABC Public Schools is September through December and February through May. A teacher began working with ABC Public Schools in September 2019. The teacher has always worked full-time for each annual work period. At the end of 2023, the teacher had 4.5 years of service with ABC Public Schools, as shown in Table 4﻿-﻿1.

T﻿a﻿b﻿l﻿e﻿ ﻿4﻿-﻿1﻿.

Teacher's Years of Service

N﻿o﻿t﻿e﻿.

This table shows how the teacher figures the years of service, as explained in the previous example.

Year

Period Worked

Portion of Work Period

Years of Service

2019

Sept.–Dec.

0.5 year

0.5 year

2020

Feb.–May

0.5 year

1 year

Sept.–Dec.

0.5 year

2021

Feb.–May

0.5 year

1 year

Sept.–Dec.

0.5 year

2022

Feb.–May

0.5 year

1 year

Sept.–Dec.

0.5 year

2023

Feb.–May

0.5 year

1 year

Sept.–Dec.

0.5 year

Total years of service

4.5 years

Full-time or part-time.

To figure your years of service, you must analyze each year individually and determine whether you worked full-time for the full year or something other than full-time. When determining whether you worked full-time or something other than full-time, use your employer's annual work period as the standard.

Employer's annual work period.

Your employer's annual work period is the usual amount of time an individual working full-time in a specific position is required to work. Generally, this period of time is expressed in days, weeks, months, or semesters, and can span 2 calendar years.

Note. You can’t accumulate more than 1 year of service in a 12-month period.

Example. All full-time teachers at ABC Public Schools are required to work both the September through December semester and the February through May semester. Therefore, the annual work period for full-time teachers employed by ABC Public Schools is September through December and February through May. Teachers at ABC Public Schools who work both semesters in the same calendar year are considered working a full year of service in that calendar year.

Full-Time Employee for the Full Year

Count each full year during which you were employed full-time as 1 year of service. In determining whether you were employed full-time, compare the amount of work you were required to perform with the amount of work normally required of others who held the same position with the same employer and who generally received most of their pay from the position.

How to compare.

You can use any method that reasonably and accurately reflects the amount of work required. For example, if you are a teacher, you can use the number of hours of classroom instruction as a measure of the amount of work required.

In determining whether positions with the same employer are the same, consider all of the facts and circumstances concerning the positions, including the work performed, the methods by which pay is determined, and the descriptions (or titles) of the positions.

Example. An assistant professor employed in the English department of a university will be considered a full-time employee if the amount of work that an assistant professor is required to perform is the same as the amount of work normally required of assistant professors of English at that university who get most of their pay from that position.

If no one else works for your employer in the same position, compare your work with the work normally required of others who held the same position with similar employers or similar positions with your employer.

Full year of service.

A full year of service for a particular position means the usual annual work period of anyone employed full-time in that general type of work at that place of employment.

Example. If a doctor works for a hospital 12 months of a year except for a 1-month vacation, the doctor will be considered as employed for a full year if the other doctors at that hospital also work 11 months of the year with a 1-month vacation. Similarly, if the usual annual work period at a university consists of the fall and spring semesters, an instructor at that university who teaches these semesters will be considered as working a full year.

Other Than Full-Time for the Full Year

If, during any year, you were employed full-time for only part of your employer's annual work period, part-time for the entire annual work period, or part-time for only part of the work period, your year of service for that year is a fraction of your employer's annual work period.

Full-time for part of the year.

If, during a year, you were employed full-time for only part of your employer's annual work period, figure the fraction for that year as follows.

The numerator (top number) is the number of weeks, months, or semesters you were a full-time employee.

The denominator (bottom number) is the number of weeks, months, or semesters considered the normal annual work period for the position.

Example. An instructor was employed full-time by a local college for the 4 months of the 2023 spring semester (February 2023 through May 2023). The annual work period for the college is 8 months (February through May and July through October). Given these facts, the instructor was employed full-time for part of the annual work period and provided ﻿ ﻿1﻿/﻿2 of a year of service. The instructor’s years of service computation for 2023 is as follows.

Number of months worked

=

4

=

1

Number of months in annual work period

8

2

Part-time for the full year.

If, during a year, you were employed part-time for the employer's entire annual work period, you figure the fraction for that year as follows.

The numerator (top number) is the number of hours or days you worked.

The denominator (bottom number) is the number of hours or days normally required of someone holding the same position who works full-time.

Example. Alex teaches one course at a local medical school 3 hours per week for two semesters. Other faculty members at the same school teach 9 hours per week for two semesters. The annual work period of the medical school is two semesters. An instructor teaching 9 hours a week for two semesters is considered a full-time employee. Given these facts, Alex has worked part-time for a full annual work period. Alex has completed ﻿ ﻿1﻿/﻿3 of a year of service, figured as shown below.

Number of hours worked per week

=

3

=

1

Number of hours per week considered full-time

9

3

Part-time for part of the year.

If, during any year, you were employed part-time for only part of your employer's annual work period, you figure your fraction for that year by multiplying two fractions.

Figure the first fraction as though you had worked full-time for part of the annual work period. The fraction is as follows.

The numerator (top number) is the number of weeks, months, or semesters you were a full-time employee.

The denominator (bottom number) is the number of weeks, months, or semesters considered the normal annual work period for the position.

Figure the second fraction as though you had worked part-time for the entire annual work period. The fraction is as follows.

The numerator (top number) is the number of hours or days you worked.

The denominator (bottom number) is the number of hours or days normally required of someone holding the same position who works full-time.

Once you have figured these two fractions, multiply them together to determine the fraction representing your partial year of service for the year.

Example. An attorney teaches a course 3 hours per week for 1 semester at a law school. The annual work period for teachers at the school is 2 semesters. All full-time instructors at the school are required to teach 12 hours per week. Based on these facts, the attorney is employed part-time for part of the annual work period. The attorney’s year of service for this year is determined by multiplying two fractions. The computation is as follows.

Attorney’s first fraction

Number of semesters worked

=

1

Number of semesters in annual work period

2

Attorney's second fraction

Number of hours worked per week

=

3

=

1

Number of hours per week considered full-time

12

4

The attorney would multiply these fractions to obtain the fractional year of service.

1

x

1

=

1

2

4

8

Figuring the Limit on Elective Deferrals

You can use Part II of Worksheet 1 in chapter﻿ ﻿9 to figure the limit on elective deferrals.

Example

Max has figured the limit on annual additions. The only other component needed before Max can determine its MAC for 2024 is the limit on elective deferrals.

Figuring Max's limit on elective deferrals.

Max has been employed with the current employer for less than 15 years. Max isn’t eligible for the special 15-year increase. Therefore, the limit on elective deferrals for 2024 is $23,000, as shown in Table 4﻿-﻿2.

Max's employer won’t make any nonelective contributions to the 403(b) account and Max won’t make any after-tax contributions. Additionally, Max's employer doesn’t offer a Roth contribution program.

Figuring Max's MAC

Max has determined that the limit on annual additions for 2024 is $69,000 and the limit on elective deferrals is $23,000. Because elective deferrals are the only contributions made to Max's account, the maximum amount that can be contributed to a 403(b) account on Max's behalf in 2024 is $23,000, the lesser of both limits.

T﻿a﻿b﻿l﻿e﻿ ﻿4﻿-﻿2﻿.

Worksheet 1. Maximum Amount Contributable (MAC)

Note. Use this worksheet to figure your MAC.

Part I. Limit on Annual Additions

 1.

Enter your includible compensation for your most recent year of service

 1.

$70,475

 2.

Maximum:

For 2023, enter $66,000.

For 2024, enter $69,000

 2.

69,000

 3.

Enter the lesser of line﻿ ﻿1 or line﻿ ﻿2. This is your limit on annual additions

 3.

69,000

Caution: If you had only nonelective contributions, skip Part II and enter the amount from line﻿ ﻿3 on line﻿ ﻿18.

Part II. Limit on Elective Deferrals

 4.

Maximum contribution:

For 2023, enter $22,500.

For 2024, enter $23,000

 4.

23,000

Note. If you have at least 15 years of service with a qualifying organization, complete lines 5 through 17. If not, enter zero (-0-) on line﻿ ﻿16 and go to line﻿ ﻿17.

 5.

Amount per year of service

 5.

 5,000

 6.

Enter your years of service

 6.

 7.

Multiply line﻿ ﻿5 by line﻿ ﻿6

 7.

 8.

Enter the total of all elective deferrals made for you by the qualifying organization for prior years

 8.

 9.

Subtract line﻿ ﻿8 from line﻿ ﻿7. If zero or less, enter zero (-0-)

 9.

-0-

10.

Maximum increase in limit for long service

10.

15,000

11.

Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year rule

11.

12.

Enter the aggregate amount of all designated Roth contributions permitted for prior years under the 15-year rule

12.

13.

Add lines 11 and 12

13.

14.

Subtract line﻿ ﻿13 from line﻿ ﻿10

14.

15.

Maximum additional contributions

15.

 3,000

16.

Enter the least of line﻿ ﻿9, 14, or 15. This is your increase in the limit for long service

16.

-0-

17.

Add lines 4 and 16. This is your limit on elective deferrals

17.

23,000

Part III. Maximum Amount Contributable

18.

If you had only nonelective contributions, enter the amount from line﻿ ﻿3. This is your MAC.

If you had only elective deferrals, enter the lesser of line﻿ ﻿3 or line﻿ ﻿17. This is your MAC.

If you had both elective deferrals and nonelective contributions, enter the amount from line﻿ ﻿3. This is your MAC. (Use the amount on line﻿ ﻿17 to determine if you have excess elective deferrals as explained in chapter﻿ ﻿7.)

18.

23,000

5.

Ministers and Church Employees

Self-employed ministers and church employees who participate in 403(b) plans generally follow the same rules as other 403(b) plan participants.

This means that if you are a self-employed minister or a church employee, your MAC is generally the lesser of:

Your limit on annual additions, or

Your limit on elective deferrals.

For most ministers and church employees, the limit on annual additions is figured without any changes. This means that if you are a minister or church employee, your limit on annual additions is generally the lesser of:

$66,000 for 2023 and $69,000 for 2024, or

Your includible compensation for your most recent year of service.

Although, in general, the same limit applies, church employees can choose an alternative limit and there are changes in how church employees, foreign missionaries, and self-employed ministers figure includible compensation for the most recent year of service. This chapter will explain the alternative limit and the changes.

Who is a church employee?

A church employee is anyone who is an employee of a church or a convention or association of churches, including an employee of a tax-exempt organization controlled by or associated with a church or a convention or association of churches.

Alternative Limit for Church Employees

If you are a church employee, you can choose to use $10,000 a year as your limit on annual additions, even if your annual additions figured under the general rule are less.

Total contributions over your lifetime under this choice can’t be more than $40,000.

Changes to Includible Compensation for Most Recent Year of Service

There are two types of changes in determining includible compensation for the most recent year of service. They are:

Changes in how the includible compensation of foreign missionaries and self-employed ministers is figured, and

A change to the years that are counted when figuring the most recent year of service for church employees and self-employed ministers.

Changes to Includible Compensation

Includible compensation is figured differently for foreign missionaries and self-employed ministers.

Foreign missionary.

If you are a foreign missionary, your includible compensation includes foreign earned income that may otherwise be excludable from your gross income under section 911.

If you are a foreign missionary, and your adjusted gross income is $17,000 or less, contributions to your 403(b) account won’t be treated as exceeding the limit on annual additions if the contributions aren’t in excess of $3,000.

You are a foreign missionary if you are either a layperson or a duly ordained, commissioned, or licensed minister of a church and you meet both of the following requirements.

You are an employee of a church or convention or association of churches.

You are performing services for the church outside the United States.

Self-employed minister.

If you are a self-employed minister, you are treated as an employee of a tax-exempt organization that is an eligible employer. Your includible compensation is your net earnings from your ministry minus the contributions made to the retirement plan on your behalf and the deductible portion of your self-employment tax.

Changes to Years of Service

Generally, only service with the employer who maintains your 403(b) account can be counted when figuring your limit on annual additions.

Church employee.

If you are a church employee, treat all of your years of service as an employee of a church or a convention or association of churches as years of service with one employer.

Self-employed minister.

If you are a self-employed minister, your years of service include full and part years during which you were self-employed.

6.

Catch-up Contributions

The most that can be contributed to your 403(b) account is the lesser of your limit on annual additions or your limit on elective deferrals.

If you will be age 50 or older by the end of the year, you may also be able to make additional catch-up contributions. These additional contributions can’t be made with after-tax employee contributions.

You are eligible to make catch-up contributions if:

You will have reached age 50 by the end of the year,

Your employer's plan document allows for catch-up contributions, and

The maximum amount of elective deferrals that can be made to your 403(b) account have been made for the plan year.

 The maximum amount of catch-up contributions is the lesser of:

$7,500 for 2023 and 2024; or

The excess of your compensation for the year, over the elective deferrals that aren’t catch-up contributions.

Figuring catch-up contributions.

When figuring allowable catch-up contributions, combine all catch-up contributions made by your employer on your behalf to the following plans.

Qualified retirement plans. (To determine if your plan is a qualified plan, ask your plan administrator.)

403(b) plans.

SARSEP plans.

SIMPLE plans.

The total amount of the catch-up contributions on your behalf to all plans maintained by your employer can’t be more than the annual limit. The limit is $7,500 for 2023 and 2024.

CautionIf you are eligible for both the 15-year rule increase in elective deferrals and the age 50 catch-up, allocate amounts first under the 15-year rule and next as an age 50 catch-up.

TipCatch-up contributions aren’t counted against your MAC. Therefore, the maximum amount that you are allowed to have contributed to your 403(b) account is your MAC plus your allowable catch-up contributions.

You can use Worksheet C in chapter﻿ ﻿9 to figure your limit on catch-up contributions.

7.

Excess Contributions

If your actual contributions (not including catch-up contributions) are greater than your MAC, you have an excess contribution. Excess contributions can result in income tax, additional taxes, and penalties. The effect of excess contributions depends on the type of excess contribution. This chapter discusses excess contributions to your 403(b) account.

How Do I Know if I Have Excess Contributions?

At the end of the year or the beginning of the next year, you should refigure your MAC based on your actual compensation and actual contributions made to your account.

If the actual contributions (not including catch-up contributions) to your account are greater than your MAC, you have excess contributions. If, at any time during the year, your employment status or your compensation changes, you should refigure your MAC using a revised estimate of compensation to prevent excess contributions.

What Happens if I Have Excess Contributions?

Certain excess contributions in a 403(b) account can be corrected. The effect of an excess 403(b) contribution will depend on the type of excess contribution.

Types of excess contributions.

If, after checking your actual contributions, you determine that you have an excess, the first thing is to identify the type of excess that you have. Excess contributions to a 403(b) account are categorized as either an:

Excess annual addition, or

Excess elective deferral.

Excess Annual Addition

An excess annual addition is a contribution (not including catch-up contributions) that is more than your limit on annual additions. To determine your limit on annual additions, see chapter﻿ ﻿3 (chapter﻿ ﻿5 for ministers or church employees).

In the year that your contributions are more than your limit on annual additions, the excess amount will be included in your income.

Excise Tax

If your 403(b) account invests in mutual funds, and you exceed your limit on annual additions, you may be subject to a 6% excise tax on the excess contribution. The excise tax doesn’t apply to funds in an annuity account or to excess deferrals.

You must pay the excise tax each year in which there are excess contributions in your account. Excess contributions can be corrected by contributing less than the applicable limit in later years or by making permissible distributions. See chapter﻿ ﻿8 for a discussion on permissible distributions.

You can’t deduct the excise tax.

Reporting requirement.

You must file Form 5330 if there has been an excess contribution to a custodial account and that excess hasn’t been corrected.

Excess Elective Deferral

An excess elective deferral is the amount that is more than your limit on elective deferrals. To determine your limit on elective deferrals, see chapter﻿ ﻿4.

Your employer's 403(b) plan may contain language permitting it to distribute excess deferrals. If so, it may require that in order to get a distribution of excess deferrals, you either notify the plan of the amount of excess deferrals or designate a distribution as an excess deferral. The plan may require that the notification or designation be in writing and may require that you certify or otherwise establish that the designated amount is an excess deferral. A plan isn’t required to permit distribution of excess deferrals.

Correction of excess deferrals during year.

If you have excess deferrals for a year, a corrective distribution may be made only if both of the following conditions are satisfied.

The plan and either you or your employer designate the distribution as an excess deferral to the extent you have excess deferrals for the year.

The correcting distribution is made after the date on which the excess deferral was made.

Correction of excess deferrals after the year.

If you have excess deferrals for a year, you may receive a correcting distribution of the excess deferral no later than April 15 of the following year. The plan can distribute the excess deferral (and any income allocable to the excess) no later than April 15 of the year following the year the excess deferral was made.

Note. When April 15 falls on a Saturday, Sunday, or legal holiday, a return is considered timely filed if filed on the next succeeding day that isn’t a Saturday, Sunday, or legal holiday.

Tax treatment of excess deferrals not attributable to Roth contributions.

If the excess deferral is distributed by April 15, it is included in your income in the year contributed and the earnings on the excess deferral will be taxed in the year distributed.

Note. When April 15 falls on a Saturday, Sunday, or legal holiday, a return is considered timely filed if filed on the next succeeding day that isn’t a Saturday, Sunday, or legal holiday.

Tax treatment of excess deferrals attributable to Roth contributions.

For these rules, see Regulations section 1.402(g)-1(e).

8.

Distributions and Rollovers

Distributions

Permissible distributions.

Generally, a distribution can’t be made from a 403(b) account until the employee:

Reaches age 59﻿ ﻿1﻿/﻿2;

Has a severance from employment;

Dies;

Becomes disabled;

In the case of elective deferrals, encounters financial hardship;

Has a qualified reservist distribution;

Has a qualified birth or adoption distribution;

Has certain distributions of lifetime income investments;

Has an emergency personal expenses distribution;

Has a domestic abuse distribution; or

Has a qualified disaster recovery distribution.

In most cases, the payments you receive or that are made available to you under your 403(b) account are taxable in full as ordinary income. In general, the same tax rules apply to distributions from 403(b) plans that apply to distributions from other retirement plans. These rules are explained in Pub. 575. Pub. 575 also discusses the additional tax on early distributions from retirement plans.

Note.  You may choose to have qualified COVID-19 distributions (as defined earlier under Reminders) included in income in equal amounts over 3 years.

Retired public safety officers.

If you are an eligible retired public safety officer, you can exclude from your gross income distributions of up to $3,000 made from your 403(b) plan that are used to pay the premiums for coverage by an accident or health plan, or a long-term care insurance contract. The premiums can be for you, your spouse, or your dependents. The distribution can be made directly from the plan to the provider of the accident or health plan or long-term care insurance contract, or the distribution can be made to you to pay to the provider of the accident or health plan or long-term care insurance contract.

A public safety officer is a law enforcement officer, fire fighter, chaplain, or member of a rescue squad or ambulance crew.

For additional information, see Pub. 575.

Distribution for active reservist.

The 10% additional tax for early withdrawals won’t apply to a qualified reservist distribution attributable to elective deferrals from a 403(b) plan. A qualified reservist distribution is a distribution that is made:

To an individual who is a reservist or national guardsman and who was ordered or called to active duty for a period in excess of 179 days or for an indefinite period, and

During the period beginning on the date of the order or call to duty and ending at the close of the active duty period.

Minimum Required Distributions

You must receive all, or at least a certain minimum, of your interest accruing after 1986 in the 403(b) plan by April 1 of the calendar year following the later of the calendar year in which you become age 73 (if you attain age 72 after December 31, 2022), or the calendar year in which you retire.

Check with your employer, plan administrator, or provider to find out whether this rule also applies to pre-1987 accruals. If not, a minimum amount of these accruals must begin to be distributed by the later of the end of the calendar year in which you reach age 75 or April 1 of the calendar year following retirement. For each year thereafter, the minimum distribution must be made by the last day of the year. If you don’t receive the required minimum distribution, you are subject to a nondeductible 25% (or 10% if timely corrected) excise tax on the difference between the required minimum distribution and the amount actually distributed.

No Special 10-Year Tax Option

A distribution from a 403(b) plan doesn’t qualify as a lump-sum distribution. This means you can’t use the special 10-year tax option to figure the taxable portion of a 403(b) distribution. For more information, see Pub. 575.

Transfer of Interest in 403(b) Contract

Contract exchanges.

If you transfer all or part of your interest from a 403(b) contract to another 403(b) contract (held in the same plan), the transfer is tax free, and is referred to as a contract exchange. This was previously known as a 90﻿-﻿24 transfer. A contract exchange is similar to a 90﻿-﻿24 transfer with one major difference. Previously, you were able to accomplish the transfer without your employer’s involvement. After September 24, 2007, all such transfers are accomplished through a contract exchange requiring your employer’s involvement. In addition, the plan must provide for the exchange and the transferred interest must be subject to the same or stricter distribution restrictions. Finally, your accumulated benefit after the exchange must be equal to what it was before the exchange.

Transfers that don’t satisfy this rule are plan distributions and are generally taxable as ordinary income.

Plan-to-plan transfers.

You may also transfer part or all of your interest from a 403(b) plan to another 403(b) plan if you are an employee of (or were formerly employed by) the employer of the plan to which you would like to transfer. Both the initial plan and the receiving plan must provide for transfers. Your accumulated benefit after the transfer must be at least equal to what it was before the transfer. The new plan’s restrictions on distributions must be the same or stricter than those of the original plan.

Tax-free transfers for certain cash distributions.

A tax-free transfer may also apply to a cash distribution of your 403(b) account from an insurance company that is subject to a rehabilitation, conservatorship, insolvency, or similar state proceeding. To receive tax-free treatment, you must do all of the following.

Withdraw all the cash to which you are entitled in full settlement of your contract rights or, if less, the maximum permitted by the state.

Reinvest the cash distribution in a single policy or contract issued by another insurance company or in a single custodial account subject to the same or stricter distribution restrictions as the original contract not later than 60 days after you receive the cash distribution.

Assign all future distribution rights to the new contract or account for investment in that contract or account if you received an amount that is less than what you are entitled to because of state restrictions.

In addition to the preceding requirements, you must provide the new insurer with a written statement containing all of the following information.

The gross amount of cash distributed under the old contract.

The amount of cash reinvested in the new contract.

Your investment in the old contract on the date you receive your first cash distribution.

Also, you must attach the following items to your timely filed income tax return in the year you receive the first distribution of cash.

A copy of the statement you gave the new insurer.

A statement that includes:

The words ELECTION UNDER REV. PROC. 92﻿-﻿44,

The name of the company that issued the new contract, and

The new policy number.

Direct trustee-to-trustee transfer.

If you make a direct trustee-to-trustee transfer from your governmental 403(b) account to a defined benefit governmental plan, it may not be includible in gross income.

The transfer amount isn’t includible in gross income if it is made to:

Purchase permissive service credits; or

Repay contributions and earnings that were previously refunded under a forfeiture of service credit under the plan, or under another plan maintained by a state or local government employer within the same state.

After-tax contributions.

For distributions beginning after December 31, 2006, after-tax contributions can be rolled over between a 403(b) plan and a defined benefit plan, an IRA, or a defined contribution plan. If the rollover is to or from a 403(b) plan, it must occur through a direct trustee-to-trustee transfer.

Permissive service credit.

A permissive service credit is credit for a period of service recognized by a defined benefit governmental plan only if you voluntarily contribute to the plan an amount that doesn’t exceed the amount necessary to fund the benefit attributable to the period of service and the amount contributed is in addition to the regular employee contribution, if any, under the plan.

A permissive service credit may also include service credit for up to 5 years where there is no performance of service, or service credited to provide an increased benefit for service credit which a participant is receiving under the plan.

Check with your plan administrator as to the type and extent of service that may be purchased by this transfer.

Tax-Free Rollovers

You can generally roll over tax free all or any part of a distribution from a 403(b) plan to a traditional IRA or a non-Roth eligible retirement plan, except for any nonqualifying distributions, described later. You may also roll over any part of a distribution from a 403(b) plan by converting it through a direct rollover, described below, to a Roth IRA. Conversion amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. See Pub. 590-A for more information about conversion into a Roth IRA.

Note.  A participant is required to roll over distribution amounts received within 60 calendar days in order for the amount to be treated as nontaxable. Distribution amounts that are rolled over within the 60 days aren’t subject to the 10% additional tax on early distributions.

Note.  The repayment of a qualified birth or adoption distribution, emergency personal expense distribution, or a distribution to a domestic abuse victim from an applicable eligible retirement plan is treated as a direct transfer of the distribution to the plan within 60 days of the distribution.

Rollovers to and from 403(b) plans.

You can generally roll over tax free all or any part of a distribution from an eligible retirement plan to a 403(b) plan. Beginning January 1, 2008, distributions from tax-qualified retirement plans and tax-sheltered annuities can be converted by making a direct rollover into a Roth IRA subject to the restrictions that currently apply to rollovers from a traditional IRA into a Roth IRA. Converted amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. See Pub. 590-A for more information on conversion into a Roth IRA.

If a distribution includes both pre-tax contributions and after-tax contributions, the portion of the distribution that is rolled over is treated as consisting first of pre-tax amounts (contributions and earnings that would be includible in income if no rollover occurred). This means that if you roll over an amount that is at least as much as the pre-tax portion of the distribution, you don’t have to include any of the distribution in income.

For more information on rollovers and eligible retirement plans, see Pub. 575.

If you roll over money or other property from a 403(b) plan to an eligible retirement plan, see Pub. 575 for information about possible effects on later distributions from the eligible retirement plan.

Hardship exception to rollover rules.

The IRS may waive the 60-day rollover period if the failure to waive such requirement would be against equity or good conscience, including cases of casualty, disaster, or other events beyond the reasonable control of an individual.

Ways to get a waiver of the 60-day rollover requirement.

There are three ways to obtain a waiver of the 60-day rollover requirement.

You qualify for an automatic waiver.

You self-certify that you met the requirements of a waiver.

You request and receive a private letter ruling granting a waiver.

How do you qualify for an automatic waiver?

You qualify for an automatic waiver if all of the following apply.

The financial institution receives the funds on your behalf before the end of the 60-day rollover period.

You followed all of the procedures set by the financial institution for depositing the funds into an IRA or other eligible retirement plan within the 60-day rollover period (including giving instructions to deposit the funds into a plan or IRA).

The funds are not deposited into a plan or IRA within the 60-day rollover period solely because of an error on the part of the financial institution.

The funds are deposited into a plan or IRA within 1 year from the beginning of the 60-day rollover period.

It would have been a valid rollover if the financial institution had deposited the funds as instructed.

If you do not qualify for an automatic waiver, you can use the self-certification procedure to make a late rollover contribution or you can apply to the IRS for a waiver of the 60-day rollover requirement.

How do you self-certify that you qualify for a waiver?

Based on Revenue Procedure 2016﻿-﻿47, 2016﻿-﻿37 I.R.B. 346, available at IRS.gov/irb/2016﻿-﻿37_IRB/ar09.html, you may make a written certification to a plan administrator or an IRA trustee that you missed the 60-day rollover contribution deadline because of one or more of the 11 reasons listed in Revenue Procedure 2016﻿-﻿47. A plan administrator or an IRA trustee may rely on the certification in accepting and reporting receipt of the rollover contribution. You may make the certification by using the model letter in the appendix to the revenue procedure or by using a letter that is substantially similar. There is no IRS fee for self certification. A copy of the certification should be kept in your files and be available if requested on audit.

For additional information on rollovers, see Pub. 590-A.

How do you apply for a waiver ruling and what is the fee?

You can request a ruling according to the procedures outlined in Revenue Procedure 2003﻿-﻿16, as modified by Revenue Procedure 2016﻿-﻿47 and Revenue Procedure 2020﻿-﻿46; and Revenue Procedure 2024﻿-﻿4. See Appendix A for the applicable user fee.

How does the IRS determine whether to grant a waiver in a private letter ruling?

In determining whether to issue a favorable letter ruling granting a waiver, the IRS will consider all of the relevant facts and circumstances, including:

Whether errors were made by the financial institution, that is, the plan administrator, or IRA trustee, issuer, or custodian;

Whether you were unable to complete the rollover within the 60-day period due to death, disability, hospitalization, incarceration, serious illness, restrictions imposed by a foreign country, or postal error;

Whether you used the amount distributed; and

How much time has passed since the date of the distribution.

Note. The IRS can waive only the 60-day rollover requirement and not the other requirements for a valid rollover contribution.

For more information on waivers of the 60-day rollover requirement, go to IRS.gov/Retirement-Plans/Retirement-Plans-FAQS-Relating-to-Waivers-of-the-60-Day-Rollover-Requirement.

Eligible retirement plans.

The following are considered eligible retirement plans.

IRAs.

Roth IRAs.

403(a) annuity plans.

403(b) plans.

Government eligible 457 plans.

Qualified retirement plans.

If the distribution is from a designated Roth account, then the only eligible retirement plan is another designated Roth account or a Roth IRA.

Nonqualifying distributions.

You can’t roll over tax free:

Minimum required distributions (generally required to begin at age 73 if you attain age 72 after December 31, 2022);

Substantially equal payments over your life or life expectancy;

Substantially equal payments over the joint lives or life expectancies of your beneficiary and you;

Substantially equal payments for a period of 10 years or more;

Hardship distributions; or

Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or excess annual additions and any allocable gains.

Rollover of nontaxable amounts.

You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another eligible retirement plan, traditional IRA, or Roth IRA. The transfer must be made either through a direct rollover to an eligible plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional IRA or Roth IRA.

If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution.

Direct rollovers of 403(b) plan distributions.

You have the option of having your 403(b) plan make the rollover directly to a traditional IRA, Roth IRA, or new plan. Before you receive a distribution, your plan will give you information on this. It is generally to your advantage to choose this option because your plan won’t withhold tax on the distribution if you choose it.

Distribution received by you.

If you receive a distribution that qualifies to be rolled over, you can roll over all or any part of the distribution. Generally, you will receive only 80% of the distribution because 20% must be withheld. If you roll over only the 80% you receive, you must pay tax on the 20% you didn’t roll over. You can replace the 20% that was withheld with other money within the 60-day period to make a 100% rollover.

Voluntary deductible contributions.

For tax years 1982 through 1986, employees could make deductible contributions to a 403(b) plan under the IRA rules instead of deducting contributions to a traditional IRA.

If you made voluntary deductible contributions to a 403(b) plan under these traditional IRA rules, the distribution of all or part of the accumulated deductible contributions may be rolled over if it otherwise qualifies as a distribution you can roll over. Accumulated deductible contributions are the deductible contributions:

Plus

Income allocable to the contributions,

Gain allocable to the contributions, and

Minus

Expenses and losses allocable to the contributions; and

Distributions from the contributions, income, or gain.

Excess employer contributions.

The portion of a distribution from a 403(b) plan transferred to a traditional IRA that was previously included in income as excess employer contributions isn’t an eligible rollover distribution.

Its transfer doesn’t affect the rollover treatment of the eligible portion of the transferred amounts. However, the ineligible portion is subject to the traditional IRA contribution limits and may create an excess IRA contribution subject to a 6% excise tax. See chapter﻿ ﻿1 of Pub. 590-A.

Qualified domestic relations order (QDRO).

You may be able to roll over tax free all or any part of an eligible rollover distribution from a 403(b) plan that you receive under a QDRO. If you receive the interest in the 403(b) plan as an employee's spouse or former spouse under a QDRO, all of the rollover rules apply to you as if you were the employee. You can roll over your interest in the plan to a traditional IRA or another 403(b) plan. For more information on the treatment of an interest received under a QDRO, see Pub. 575.

Spouses of deceased employees.

If you are the spouse of a deceased employee, you can roll over the qualifying distribution attributable to the employee. You can make the rollover to any eligible retirement plan.

After you roll money and other property over from a 403(b) plan to an eligible retirement plan, and you take a distribution from that plan, you won’t be eligible to receive the capital gain treatment or the special averaging treatment for the distribution.

Second rollover.

If you roll over a qualifying distribution to a traditional IRA, you can, if certain conditions are satisfied, later roll the distribution into another 403(b) plan. For more information, see IRA as a holding account (conduit IRA) for rollovers to other eligible plans in chapter﻿ ﻿1 of Pub. 590-A.

Nonspouse beneficiary.

A nonspouse beneficiary may make a direct rollover of a distribution from a 403(b) plan of a deceased participant if the rollover is a direct transfer to an inherited IRA established to receive the distribution. If the rollover is a direct trustee-to-trustee transfer to an IRA established to receive the distribution:

The transfer will be treated as an eligible rollover distribution,

The IRA will be considered an inherited account, and

The required minimum distribution rules that apply in instances where the participant dies before the entire interest is distributed will apply to the transferred IRA.

 For more information on IRAs, see Pubs. 590-A and 590-B.

Frozen deposits.

The 60-day period usually allowed for completing a rollover is extended for any time that the amount distributed is a frozen deposit in a financial institution. The 60-day period can’t end earlier than 10 days after the deposit ceases to be a frozen deposit.

A frozen deposit is any deposit that on any day during the 60-day period can’t be withdrawn because:

The financial institution is bankrupt or insolvent, or

The state where the institution is located has placed limits on withdrawals because one or more banks in the state are (or are about to be) bankrupt or insolvent.

Gift Tax

If, by choosing or not choosing an election, or option, you provide an annuity for your beneficiary at or after your death, you may have made a taxable gift equal to the value of the annuity.

Joint and survivor annuity.

If the gift is an interest in a joint and survivor annuity where only you and your spouse have the right to receive payments, the gift will generally be treated as qualifying for the unlimited marital deduction.

More information.

For information on the gift tax, see Pub. 559, Survivors, Executors, and Administrators.

9.

Worksheets

Chapter 2 introduced you to the term “maximum amount contributable” (MAC). Generally, your MAC is the lesser of your:

Limit on annual additions (chapter﻿ ﻿3), or

Limit on elective deferrals (chapter﻿ ﻿4).

The worksheets in this chapter can help you figure the cost of incidental life insurance, your includible compensation, your limit on annual additions, your limit on elective deferrals, your limit on catch-up contributions, and your MAC.

After completing the worksheets, you should maintain them with your 403(b) records for that year. Do not attach them to your tax return. At the end of the year or the beginning of the next year, you should compare your estimated compensation figures with your actual figures.

If your compensation is the same as, or more than, the projected amounts and the calculations are correct, then you should simply file these worksheets with your other tax records for the year.

 If your compensation was lower than your estimated figures, you will need to check the amount contributed during the year to determine if contributions are more than your MAC.

When Should I Figure MAC?

At the beginning of each year, you should figure your MAC using a conservative estimate of your compensation. Should your income change during the year, you should refigure your MAC based on a revised conservative estimate. By doing this, you will be able to determine if contributions to your 403(b) account should be increased or decreased for the year.

Checking the Previous Year's Contributions

At the beginning of the following year, you should refigure your MAC based on your actual earned income.

At the end of the current year or the beginning of the next year, you should check your contributions to be sure you didn’t exceed your MAC. This means refiguring your limit based on your actual compensation figures for the year. This will allow you to determine if the amount contributed is more than the allowable amounts, and possibly avoid additional taxes.

Available Worksheets

The following worksheets have been provided to help you figure your MAC.

Worksheet A. Cost of Incidental Life Insurance.

Worksheet B. Includible Compensation for Your Most Recent Year of Service.

Worksheet C. Limit on Catch-up Contributions.

Worksheet 1. Maximum Amount Contributable (MAC).

W﻿o﻿r﻿k﻿s﻿h﻿e﻿e﻿t﻿ ﻿A﻿.

Cost of Incidental Life Insurance

Note. Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. This amount will be used to figure includible compensation for your most recent year of service.

1.

Enter the value of the contract (amount payable upon your death)

1.

2.

Enter the cash value in the contract at the end of the year

2.

3.

Subtract line﻿ ﻿2 from line﻿ ﻿1. This is the value of your current life insurance protection

3.

4.

Enter your age on your birthday nearest the beginning of the policy year

4.

5.

Enter the 1-year term premium for $1,000 of life insurance based on your age. (From Figure 3﻿-﻿1)

5.

6.

Divide line﻿ ﻿3 by $1,000

6.

7.

Multiply line﻿ ﻿6 by line﻿ ﻿5. This is the cost of your incidental life insurance

7.

W﻿o﻿r﻿k﻿s﻿h﻿e﻿e﻿t﻿ ﻿B﻿.

Includible Compensation for Your Most Recent Year of Service¹

Note. Use this worksheet to figure includible compensation for your most recent year of service.

 1.

Enter your includible wages from the employer maintaining your 403(b) account for your most recent year of service

 1.

 2.

Enter elective deferrals excluded from your gross income for your most recent year of service²

 2.

 3.

Enter amounts contributed or deferred by your employer under a cafeteria plan for your most recent year of service

 3.

 4.

Enter amounts contributed or deferred by your employer according to your election to your 457 account (a nonqualified plan of a state or local government or of a tax-exempt organization) for your most recent year of service

 4.

 5.

Enter pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan for your most recent year of service

 5.

 6.

Enter your foreign earned income exclusion for your most recent year of service

 6.

 7.

Add lines 1, 2, 3, 4, 5, and 6

 7.

 8.

Enter the cost of incidental life insurance that is part of your annuity contract for your most recent year of service

 8.

 9.

Enter compensation that was both:

Earned during your most recent year of service, and

Earned while your employer wasn’t qualified to maintain a 403(b) plan

 9.

10.

Add lines 8 and 9

10.

11.

Subtract line﻿ ﻿10 from line﻿ ﻿7. This is your includible compensation for your most recent year of service

11.

¹ Use estimated amounts if figuring includible compensation before the end of the year.
² Elective deferrals made to a designated Roth account aren’t excluded from your gross income and shouldn’t be included on this line.

W﻿o﻿r﻿k﻿s﻿h﻿e﻿e﻿t﻿ ﻿C﻿.

Limit on Catch-up Contributions

Note. If you will be age 50 or older by the end of the year, use this worksheet to figure your limit on catch-up contributions.

1.

Maximum catch-up contributions

1.

$7,500

2.

Enter your includible compensation for your most recent year of service

2.

3.

Enter your elective deferrals

3.

4.

Subtract line﻿ ﻿3 from line﻿ ﻿2

4.

5.

Enter the lesser of line﻿ ﻿1 or line﻿ ﻿4. This is your limit on catch-up contributions

5.

W﻿o﻿r﻿k﻿s﻿h﻿e﻿e﻿t﻿ ﻿1﻿.

Maximum Amount Contributable (MAC)

Note. Use this worksheet to figure your MAC.

Part I. Limit on Annual Additions

 1.

Enter your includible compensation for your most recent year of service

 1.

 2.

Maximum:¹

For 2023, enter $66,000.

For 2024, enter $69,000

 2.

 3.

Enter the lesser of line﻿ ﻿1 or line﻿ ﻿2. This is your limit on annual additions

 3.

Caution: If you had only nonelective contributions, skip Part II and enter the amount from line﻿ ﻿3 on line﻿ ﻿18.

Part II. Limit on Elective Deferrals

 4.

Maximum contribution:

For 2023, enter $22,500.

For 2024, enter $23,000

 4.

Note. If you have at least 15 years of service with a qualifying organization, complete lines 5 through 17. If not, enter zero (-0-) on line﻿ ﻿16 and go to line﻿ ﻿17.

 5.

Amount per year of service

 5.

$﻿ ﻿5,000

 6.

Enter your years of service

 6.

 7.

Multiply line﻿ ﻿5 by line﻿ ﻿6

 7.

 8.

Enter the total of all elective deferrals made for you by the qualifying organization for prior years

 8.

 9.

Subtract line﻿ ﻿8 from line﻿ ﻿7. If zero or less, enter zero (-0-)

 9.

10.

Maximum increase in limit for long service

10.

$15,000

11.

Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year rule

11.

12.

Enter the aggregate amount of all designated Roth contributions permitted for prior years under the 15-year rule

12.

13.

Add line﻿ ﻿11 and line﻿ ﻿12

13.

14.

Subtract line﻿ ﻿13 from line﻿ ﻿10

14.

15.

Maximum additional contributions

15.

$﻿ ﻿3,000

16.

Enter the least of line﻿ ﻿9, 14, or 15. This is your increase in the limit for long service

16.

17.

Add lines 4 and 16. This is your limit on elective deferrals

17.

Part III. Maximum Amount Contributable

18.

If you had only nonelective contributions, enter the amount from line﻿ ﻿3. This is your MAC.

If you had only elective deferrals, enter the lesser of line﻿ ﻿3 or line﻿ ﻿17. This is your MAC.

If you had both elective deferrals and nonelective contributions, enter the amount from line﻿ ﻿3. This is your MAC. (Use the amount on line﻿ ﻿17 to determine if you have excess elective deferrals as explained in chapter﻿ ﻿7.)

18.

¹ If you participate in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a qualified plan and simplified employee pension plans of all corporations, partnerships, and sole proprietorships in which you have more than 50% control. You must also combine the contributions made to all 403(b) accounts on your behalf by your employer.

10.

Retirement Savings Contributions Credit (Saver's Credit)

If you or your employer makes eligible contributions (defined later) to a retirement plan, you may be able to take a credit of up to $2,000 (up to $4,000 if filing jointly). This credit could reduce the federal income tax you pay dollar for dollar.

Can you claim the credit?

If you or your employer makes eligible contributions to a retirement plan, you can claim the credit if all of the following apply.

You aren’t under age 18.

You aren’t a full-time student (explained next).

No one else, such as your parent(s), claims an exemption for you on their tax return.

Your adjusted gross income (defined later) isn’t more than:

$73,000 for 2023 ($76,500 for 2024) if your filing status is married filing jointly;

$54,750 for 2023 ($57,375 for 2024) if your filing status is head of household (with qualifying person); or

$36,500 for 2023 ($38,250 for 2024) if your filing status is single, married filing separately, or qualifying surviving spouse with dependent child.

Full-time student.

You are a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you are either:

A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance; or

A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance; or a state, county, or local government.

You are a full-time student if you are enrolled for the number of hours or courses the school considers to be full-time.

Adjusted gross income.

This is generally the amount on line﻿ ﻿11 of your 2023 Form 1040 or 1040-SR. For purposes of this section, adjusted gross income shall be determined without regard to sections 911, 931, and 933. You must add to that amount any exclusion or deduction from gross income claimed for the year for:

Foreign earned income,

Foreign housing costs,

Income for bona fide residents of American Samoa, Guam, or the Northern Mariana Islands, and

Income from Puerto Rico.

Eligible contributions.

These include:

Contributions to a traditional or Roth IRA;

Elective deferrals, including amounts designated as after-tax Roth contributions, to:

A 401(k) plan (including a SIMPLE 401(k) plan),

A section 403(b) annuity,

An eligible deferred compensation plan of a state or local government (a governmental 457 plan),

A SIMPLE IRA plan, or

A salary reduction SEP;

Contributions to a section 501(c)(18) plan; and

ABLE account contributions by the designated beneficiary as defined by section 529A.

They also include voluntary after-tax employee contributions to a tax-qualified retirement plan or a section 403(b) annuity. For purposes of the credit, an employee contribution will be voluntary as long as it isn’t required as a condition of employment.

Reducing eligible contributions.

Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period (defined later) from any IRA, plan, or annuity included earlier under Eligible contributions. Also, reduce your eligible contributions by any distribution from a Roth IRA that isn’t rolled over, even if the distribution isn’t taxable.

Do not reduce your eligible contributions by any of the following.

The portion of any distribution which isn’t includible in income because it is a trustee-to-trustee transfer or a rollover distribution.

Distributions that are taxable as the result of an in-plan rollover to your designated Roth account.

Any distribution that is a return of a contribution to an IRA (including a Roth IRA) made during the year for which you claim the credit if:

The distribution is made before the due date (including extensions) of your tax return for that year,

You don’t take a deduction for the contribution, and

The distribution includes any income attributable to the contribution.

Loans from a qualified employer plan treated as a distribution.

Distributions of excess contributions or deferrals (and income attributable to excess contributions and deferrals).

Distributions of dividends paid on stock held by an employee stock ownership plan under section 404(k).

Distributions from an eligible retirement plan that are converted or rolled over to a Roth IRA.

Distributions from a military retirement plan.

Distributions from an inherited IRA by a nonspousal beneficiary.

Distributions received by spouse.

Any distributions your spouse receives are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit.

Testing period.

The testing period consists of:

The year in which you claim the credit,

The 2 years before the year in which you claim the credit, and

The period after the end of the year in which you claim the credit and before the due date of the return (including extensions) for filing your return for the year in which you claimed the credit.

Example. You and your spouse filed joint returns in 2021 and 2022, and plan to do so in 2023 and 2024. You received a taxable distribution from a qualified plan in 2021 and a taxable distribution from an eligible section 457(b) deferred compensation plan in 2022. Your spouse received taxable distributions from a Roth IRA in 2023 and tax-free distributions from a Roth IRA in 2024 before April 15. You made eligible contributions to an IRA in 2023 and you otherwise qualify for this credit. You must reduce the amount of your qualifying contributions in 2023 by the total of the distributions you and your spouse received in 2021, 2022, 2023, and 2024.

Maximum eligible contributions.

After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person.

Effect on other credits.

The amount of this credit won’t change the amount of your refundable tax credits. A refundable tax credit, such as the earned income credit or the additional child tax credit, is an amount that you would receive as a refund even if you didn’t otherwise owe any taxes.

Maximum credit.

This is a nonrefundable credit. The amount of the credit in any year can’t be more than the amount of tax that you would otherwise pay (not counting any refundable credits or the adoption credit) in any year. If your tax liability is reduced to zero because of other nonrefundable credits, such as the education credits, then you won’t be entitled to this credit.

How to figure and report the credit.

The amount of the credit you can get is based on the contributions you make and your credit rate. The credit rate can be as low as 10% or as high as 50%. Your credit rate depends on your income and your filing status. See Form 8880 to determine your credit rate.

The maximum contribution taken into account is $2,000 per person. On a joint return, up to $2,000 is taken into account for each spouse.

Figure the credit on Form 8880. Report the credit on line﻿ ﻿4 of your 2023 Schedule 3 (Form 1040) and attach Form 8880 to your return.

11. How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, forms, or instructions, go to IRS.gov to find resources that can help you right away.

Preparing and filing your tax return.

After receiving all your wage and earnings statements (Forms W-2, W-2G, 1099-R, 1099-MISC, 1099-NEC, etc.); unemployment compensation statements (by mail or in a digital format) or other government payment statements (Form 1099-G); and interest, dividend, and retirement statements from banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you qualify for free tax preparation, or hire a tax professional to prepare your return.

Free options for tax preparation.

Your options for preparing and filing your return online or in your local community, if you qualify, include the following.

Free File. This program lets you prepare and file your federal individual income tax return for free using software or Free File Fillable Forms. However, state tax preparation may not be available through Free File. Go to IRS.gov/FreeFile to see if you qualify for free online federal tax preparation, e-filing, and direct deposit or payment options.

VITA. The Volunteer Income Tax Assistance (VITA) program offers free tax help to people with low-to-moderate incomes, persons with disabilities, and limited-English-speaking taxpayers who need help preparing their own tax returns. Go to IRS.gov/VITA, download the free IRS2Go app, or call 800﻿-﻿906﻿-﻿9887 for information on free tax return preparation.

TCE. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors. Go to IRS.gov/TCE or download the free IRS2Go app for information on free tax return preparation.

MilTax. Members of the U.S. Armed Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military OneSource. For more information, go to MilitaryOneSource (MilitaryOneSource.mil/MilTax).Also, the IRS offers Free Fillable Forms, which can be completed online and then e-filed regardless of income.

Using online tools to help prepare your return.

Go to IRS.gov/Tools for the following.

The Earned Income Tax Credit Assistant (IRS.gov/EITCAssistant) determines if you’re eligible for the earned income credit (EIC).

The Online EIN Application (IRS.gov/EIN) helps you get an employer identification number (EIN) at no cost.

The Tax Withholding Estimator (IRS.gov/W4app) makes it easier for you to estimate the federal income tax you want your employer to withhold from your paycheck. This is tax withholding. See how your withholding affects your refund, take-home pay, or tax due.

The First-Time Homebuyer Credit Account Look-up (IRS.gov/HomeBuyer) tool provides information on your repayments and account balance.

The Sales Tax Deduction Calculator (IRS.gov/SalesTax) figures the amount you can claim if you itemize deductions on Schedule﻿ ﻿A (Form 1040).

Getting answers to your tax questions.On IRS.gov, you can get up-to-date information on current events and changes in tax law.

IRS.gov/Help: A variety of tools to help you get answers to some of the most common tax questions.

IRS.gov/ITA: The Interactive Tax Assistant, a tool that will ask you questions and, based on your input, provide answers on a number of tax law topics.

IRS.gov/Forms: Find forms, instructions, and publications. You will find details on the most recent tax changes and interactive links to help you find answers to your questions.

You may also be able to access tax law information in your electronic filing software.

Need someone to prepare your tax return?

There are various types of tax return preparers, including enrolled agents, certified public accountants (CPAs), accountants, and many others who don’t have professional credentials. If you choose to have someone prepare your tax return, choose that preparer wisely. A paid tax preparer is:

Primarily responsible for the overall substantive accuracy of your return,

Required to sign the return, and

Required to include their preparer tax identification number (PTIN).

Although the tax preparer always signs the return, you're ultimately responsible for providing all the information required for the preparer to accurately prepare your return and for the accuracy of every item reported on the return. Anyone paid to prepare tax returns for others should have a thorough understanding of tax matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov.

Employers can register to use Business Services Online.

The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure online W-2 filing options to CPAs, accountants, enrolled agents, and individuals who process Form W-2, Wage and Tax Statement, and Form W-2c, Corrected Wage and Tax Statement.

IRS social media.

Go to IRS.gov/SocialMedia to see the various social media tools the IRS uses to share the latest information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our highest priority. We use these tools to share public information with you. Don’t post your social security number (SSN) or other confidential information on social media sites. Always protect your identity when using any social networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, Spanish, and ASL.

Youtube.com/irsvideos.

Youtube.com/irsvideosmultilingua.

Youtube.com/irsvideosASL.

Watching IRS videos.

The IRS Video portal (IRSVideos.gov) contains video and audio presentations for individuals, small businesses, and tax professionals.

Online tax information in other languages.

You can find information on IRS.gov/MyLanguage if English isn’t your native language.

Free Over-the-Phone Interpreter (OPI) Service.

The IRS is committed to serving taxpayers with limited-English proficiency (LEP) by offering OPI services. The OPI Service is a federally funded program and is available at Taxpayer Assistance Centers (TACs), most IRS offices, and every VITA/TCE tax return site. The OPI Service is accessible in more than 350 languages.

Accessibility Helpline available for taxpayers with disabilities.

Taxpayers who need information about accessibility services can call 833﻿-﻿690﻿-﻿0598. The Accessibility Helpline can answer questions related to current and future accessibility products and services available in alternative media formats (for example, braille, large print, audio, etc.). The Accessibility Helpline does not have access to your IRS account. For help with tax law, refunds, or account-related issues, go to IRS.gov/LetUsHelp.

Note.  Form 9000, Alternative Media Preference, or Form 9000(SP) allows you to elect to receive certain types of written correspondence in the following formats.

Standard Print.

Large Print.

Braille.

Audio (MP3).

Plain Text File (TXT).

Braille Ready File (BRF).

Disasters.

Go to IRS.gov/DisasterRelief to review the available disaster tax relief.

Getting tax forms and publications.

Go to IRS.gov/Forms to view, download, or print all the forms, instructions, and publications you may need. Or, you can go to IRS.gov/OrderForms to place an order.

Getting tax publications and instructions in eBook format.

Download and view most tax publications and instructions (including the Instructions for Form 1040) on mobile devices as eBooks at IRS.gov/eBooks.

IRS eBooks have been tested using Apple's iBooks for iPad. Our eBooks haven’t been tested on other dedicated eBook readers, and eBook functionality may not operate as intended.

Access your online account (individual taxpayers only).

Go to IRS.gov/Account to securely access information about your federal tax account.

View the amount you owe and a breakdown by tax year.

See payment plan details or apply for a new payment plan.

Make a payment or view 5 years of payment history and any pending or scheduled payments.

Access your tax records, including key data from your most recent tax return, and transcripts.

View digital copies of select notices from the IRS.

Approve or reject authorization requests from tax professionals.

View your address on file or manage your communication preferences.

Get a transcript of your return.

With an online account, you can access a variety of information to help you during the filing season. You can get a transcript, review your most recently filed tax return, and get your adjusted gross income. Create or access your online account at IRS.gov/Account.

Tax Pro Account.

This tool lets your tax professional submit an authorization request to access your individual taxpayer IRS online account. For more information, go to IRS.gov/TaxProAccount.

Using direct deposit.

The safest and easiest way to receive a tax refund is to e-file and choose direct deposit, which securely and electronically transfers your refund directly into your financial account. Direct deposit also avoids the possibility that your check could be lost, stolen, destroyed, or returned undeliverable to the IRS. Eight in 10 taxpayers use direct deposit to receive their refunds. If you don’t have a bank account, go to IRS.gov/DirectDeposit for more information on where to find a bank or credit union that can open an account online.

Reporting and resolving your tax-related identity theft issues.

Tax-related identity theft happens when someone steals your personal information to commit tax fraud. Your taxes can be affected if your SSN is used to file a fraudulent return or to claim a refund or credit.

The IRS doesn’t initiate contact with taxpayers by email, text messages (including shortened links), telephone calls, or social media channels to request or verify personal or financial information. This includes requests for personal identification numbers (PINs), passwords, or similar information for credit cards, banks, or other financial accounts.

Go to IRS.gov/IdentityTheft, the IRS Identity Theft Central webpage, for information on identity theft and data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or stolen or you suspect you’re a victim of tax-related identity theft, you can learn what steps you should take.

Get an Identity Protection PIN (IP PIN). IP PINs are six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your SSN. To learn more, go to IRS.gov/IPPIN.

Ways to check on the status of your refund.

Go to IRS.gov/Refunds.

Download the official IRS2Go app to your mobile device to check your refund status.

Call the automated refund hotline at 800﻿-﻿829﻿-﻿1954.

CautionThe IRS can’t issue refunds before mid-February for returns that claimed the EIC or the additional child tax credit (ACTC). This applies to the entire refund, not just the portion associated with these credits.

Making a tax payment.

Go to IRS.gov/Payments for information on how to make a payment using any of the following options.

IRS Direct Pay: Pay your individual tax bill or estimated tax payment directly from your checking or savings account at no cost to you.

Debit or Credit Card: Choose an approved payment processor to pay online or by phone.

Electronic Funds Withdrawal: Schedule a payment when filing your federal taxes using tax return preparation software or through a tax professional.

Electronic Federal Tax Payment System: Best option for businesses. Enrollment is required.

Check or Money Order: Mail your payment to the address listed on the notice or instructions.

Cash: You may be able to pay your taxes with cash at a participating retail store.

Same-Day Wire: You may be able to do same-day wire from your financial institution. Contact your financial institution for availability, cost, and time frames.

Note. The IRS uses the latest encryption technology to ensure that the electronic payments you make online, by phone, or from a mobile device using the IRS2Go app are safe and secure. Paying electronically is quick, easy, and faster than mailing in a check or money order.

What if I can’t pay now?

Go to IRS.gov/Payments for more information about your options.

Apply for an online payment agreement (IRS.gov/OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once you complete the online process, you will receive immediate notification of whether your agreement has been approved.

Use the Offer in Compromise Pre-Qualifier to see if you can settle your tax debt for less than the full amount you owe. For more information on the Offer in Compromise program, go to IRS.gov/OIC.

Filing an amended return.

Go to IRS.gov/Form1040X for information and updates.

Checking the status of your amended return.

Go to IRS.gov/WMAR to track the status of Form 1040-X amended returns.

CautionIt can take up to 3 weeks from the date you filed your amended return for it to show up in our system, and processing it can take up to 16 weeks.

Understanding an IRS notice or letter you’ve received.

Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

Responding to an IRS notice or letter.

You can now upload responses to all notices and letters using the Document Upload Tool. For notices that require additional action, taxpayers will be redirected appropriately on IRS.gov to take further action. To learn more about the tool, go to IRS.gov/Upload.

Note. You can use Schedule﻿ ﻿LEP (Form 1040), Request for Change in Language Preference, to state a preference to receive notices, letters, or other written communications from the IRS in an alternative language. You may not immediately receive written communications in the requested language. The IRS’s commitment to LEP taxpayers is part of a multi-year timeline that is scheduled to begin providing translations in 2023. You will continue to receive communications, including notices and letters in English until they are translated to your preferred language.

Contacting your local TAC.

Keep in mind, many questions can be answered on IRS.gov without visiting an IRS TAC. Go to IRS.gov/LetUsHelp for the topics people ask about most. If you still need help, TACs provide tax help when a tax issue can’t be handled online or by phone. All TACs now provide service by appointment, so you’ll know in advance that you can get the service you need without long wait times. Before you visit, go to IRS.gov/TACLocator to find the nearest TAC and to check hours, available services, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate Service (TAS) Is Here To Help You

What Is TAS?

TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Their job is to ensure that every taxpayer is treated fairly and that you know and understand your rights under the Taxpayer Bill of Rights.

How Can You Learn About Your Taxpayer Rights?

The Taxpayer Bill of Rights describes 10 basic rights that all taxpayers have when dealing with the IRS. Go to TaxpayerAdvocate.IRS.gov to help you understand what these rights mean to you and how they apply. These are your rights. Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you can’t resolve with the IRS. And their service is free. If you qualify for their assistance, you will be assigned to one advocate who will work with you throughout the process and will do everything possible to resolve your issue. TAS can help you if:

Your problem is causing financial difficulty for you, your family, or your business;

You face (or your business is facing) an immediate threat of adverse action; or

You’ve tried repeatedly to contact the IRS but no one has responded, or the IRS hasn’t responded by the date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, and Puerto Rico. To find your advocate's number:

Go to TaxpayerAdvocate.IRS.gov/Contact-Us;

Download Pub. 1546, Taxpayer Advocate Service Is Your Voice at the IRS, available at IRS.gov/pub/irs-pdf/p1546.pdf;

Call the IRS toll free at 800-TAX-FORM (800﻿-﻿829﻿-﻿3676) to order a copy of Pub. 1546;

Check your local directory; or

Call TAS toll free at 877﻿-﻿777﻿-﻿4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect many taxpayers. If you know of one of these broad issues, report it to TAS at IRS.gov/SAMS.

Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, go to the LITC page at TaxpayerAdvocate.IRS.gov/about-us/Low-Income-Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low Income Taxpayer Clinic List at IRS.gov/pub/irs-pdf/p4134.pdf.

Index

Numbers | A | B | C | D | E | F | G | I | L | M | N | P | Q | R | S | T | V | W | Y

Numbers

403(b) account What Is a 403(b) Plan?

403(b) plans:

Basics 403(b) Plan Basics

Benefits What Are the Benefits﻿…

Participation Who Can Participate﻿…

Self-employed ministers Who Can Set up a 403(b)﻿…

What is a 403(b) plan? What Is a 403(b) Plan?

Who can set up a 403(b) account? Who Can Set up a 403(b)﻿…

A

After-tax contributions How Can Contributions﻿…

Assistance (See Tax help)

B

Basics 403(b) Plan Basics

Benefits What Are the Benefits﻿…

C

Catch-up contributions Catch-up Contributions

Chaplain Ministers.

Church employees Ministers and Church﻿…

Years of service Changes to Years of﻿…

Contributions How Can Contributions﻿…

After-tax How Can Contributions﻿…

Catch-up Catch-up Contributions

Elective deferrals How Can Contributions﻿…, Elective deferrals only

Nonelective How Can Contributions﻿…

Reporting Do I Report Contributions﻿…

Correcting excess contributions What Happens if I Have﻿…

Credit, for retirement savings contributions Retirement Savings Contributions﻿…

D

Distributions Distributions and Rollovers, Distributions

10-year tax option No Special 10-Year Tax﻿…

90-24 transfer Contract exchanges.

Deceased employees Spouses of deceased﻿…

Direct rollover Direct rollovers of﻿…

Eligible retirement plans Eligible retirement﻿…

Frozen deposit Frozen deposits.

Gift tax Gift Tax

Minimum required Minimum Required Distributions

Qualified domestic relations order Qualified domestic relations﻿…

Rollovers Tax-Free Rollovers, Rollovers to and from﻿…

Second rollover Second rollover.

Transfers Transfer of Interest﻿…

E

Elective deferrals How Can Contributions﻿…, Elective deferrals only

Eligible employees Eligible employees., Church employee.

Employer's annual work period Employer's annual work﻿…

Excess contributions Excess Contributions

Correcting What Happens if I Have﻿…

Determining How Do I Know if I Have﻿…

Excess amounts Excess Annual Addition

Excess deferrals Excess Annual Addition

Excess elective deferral Excess Elective Deferral

Excise tax Excise Tax

Excise tax:

Excess contributions Excise Tax

Reporting requirement Reporting requirement

F

Full-time or part-time Years of Service

G

Gift tax Gift Tax

I

Incidental life insurance Cost of Incidental Life﻿…

Includible compensation Includible Compensation

403(b) plan Changes to Includible﻿…

Figuring Figuring Includible﻿…

Foreign missionaries Changes to Includible﻿…

Incidental life insurance Cost of Incidental Life﻿…

Self-employed ministers Changes to Includible﻿…

Includible compensation for your most recent year of service:

Definition Definition.

L

Limit on annual additions Limit on Annual Additions

Limit on elective deferrals Limit on Elective Deferrals

15-year rule 15-Year Rule

Figuring Figuring the Limit on﻿…

General limit General Limit

M

MAC (See Maximum amount contributable)

Maximum amount contributable Maximum Amount Contributable﻿…

Components Components of Your MAC

How to figure MAC How Do I Figure My MAC?

When to figure MAC When Should I Figure﻿…

Minimum required distributions Minimum Required Distributions

Ministers Ministers., Ministers and Church﻿…

Missing children Photographs of missing﻿…

Most recent year of service Most Recent Year of﻿…

Most recent year of service, figuring Figuring Your Most Recent﻿…

N

Nonelective contributions How Can Contributions﻿…, Nonelective contributions﻿…

P

Pre-tax contributions Includible Compensation, Example. , Rollovers to and from﻿…, Available Worksheets

Publications (See Tax help)

Q

Qualified domestic relations order Qualified domestic relations﻿…

qualified birth or adoption Permissible distributions

qualified birth or adoption distribution Note.

R

Reporting Contributions:

Self-employed ministers Self-employed ministers

Reporting contributions:

Chaplains Chaplains.

Required distributions Minimum Required Distributions

Retirement savings contributions credit Retirement savings contributions﻿…, Retirement Savings Contributions﻿…

Rollovers Distributions and Rollovers, Tax-Free Rollovers

Roth contribution program Roth contribution program

retirement income accounts What Is a 403(b) Plan?, Self-employed minister

S

Salary reduction agreement Limit on Elective Deferrals

Self-employed ministers Ministers., Who Can Set up a 403(b)﻿…, Self-employed minister, Self-employed ministers

T

Tax help 11. How To Get Tax Help

Transfers Transfer of Interest﻿…

90-24 transfer Transfer of Interest﻿…

Conservatorship Contract exchanges.

Direct-trustee-to-trustee Direct trustee-to-trustee﻿…

Insolvency Tax-free transfers for﻿…

Permissive service credit Permissive service credit

V

Voluntary deductible contributions Voluntary deductible﻿…

W

What is a 403(b) plan? What Is a 403(b) Plan?

Y

Years of service Years of Service

Church employees Church employee., Changes to Years of﻿…

Definition Definition

Employer's annual work period Employer's annual work﻿…

Full year of service Full year of service

Full-time employee for the full year Full-Time Employee for﻿…

Full-time for part of the year Full-time for part of﻿…

Other than full-time for the full year Other Than Full-Time﻿…

Part-time for the full year Part-time for the full﻿…

Part-time for the part of the year Part-time for part of﻿…

Self-employed minister Changes to Years of﻿…

Total years of service Total years of service