Publication 571 - Tax-Sheltered Annuity Plans (403(B) Plans) For Employees Of Public Schools And Certain Tax-Exempt Organizations Page 17
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37General Limit
b) The unused portion of the general limit
in prior years.
8.
Under the general limit, the most that could be
contributed to your 403(b) account and your 457
Add the unused portion of the general limit only
account combined is the lesser of the following
for prior years in which all three of the following
amounts:
requirements were met.
Contributing to
•
•
$8,500, or
The year began after 1978.
•
•
One-third of your includible compensation.
Both a 403(b)
You were eligible to participate in the 457
plan during the year.
This limit is reduced by elective deferrals
•
The general limit applied to contributions
Plan and a 457
under a 401(k) plan, SEP plan, or a SIMPLE
made to your account for the year.
IRA.
Plan
403(b) contributions only. If you were eligi-
Includible Compensation
ble to participate in both a 457 plan and a 403(b)
plan during 2001 and you chose to contribute
Includible compensation under a 457 plan is not
This chapter does not apply to years
only to a 403(b) plan, contributions to your
!
the same as includible compensation under a
beginning after 2001. If in 2002 you
403(b) account are taken into consideration in
403(b) plan.
contributed to a 457 plan, see your
CAUTION
Generally, includible compensation for a 457
applying the 457 catch-up limit.
plan administrator for information on figuring
plan is the taxable wages on your Form W-2
your allowable 457 contributions.
If, for each year that you were eligible to
from the employer who set up the 457 account
participate in both a 457 plan and a 403(b) plan,
This chapter will help participants figure the
on your behalf.
you elected to defer the maximum amount,
maximum amount that can be contributed in
Contributions to a 403(b) plan, 457 plan,
through elective deferrals to your 403(b) ac-
2001 to both a 403(b) account and a 457 ac-
401(k) plan, or a SEP plan, made in the current
count, you cannot use the catch-up limit. How-
count.
year, are not part of your includible compensa-
ever, if you did not defer the maximum each
tion.
403(b) plan contributions only. If, in
year, you may have unused contributions and
!
2001, you were eligible to participate in
therefore be eligible to use the catch-up limit.
Example.
Sylvia is employed by a local
both a 457 plan and a 403(b) plan but
CAUTION
school district. In 2001, her compensation was
you chose to contribute only to the 403(b) plan,
Example. Although eligible to participate in
$24,000. Sylvia had $6,000 contributed to her
the discussions in this chapter do not apply to
both a 457 plan and a 403(b) plan, Jessica has
457 account through a salary reduction agree-
you. Read chapters 2 through 6 to determine
ment. Her includible compensation is $18,000
only contributed to a 403(b) plan and has de-
your MAC for 2001.
($24,000 – $6,000).
ferred the maximum amount each year. Jessica
457 plan contributions only. If in 2001, you
is now within 3 years of her employer’s normal
were eligible to participate in both a 457 plan
Catch-Up Limit
and a 403(b) plan, but you chose not to defer
retirement age and wants to take advantage of
any compensation under the 403(b) plan, you
the 457 catch-up limit and defer $15,000. Jes-
Under the catch-up limit, contributions for the
will need to contact your plan administrator to
sica has contributed the maximum amount al-
last 3 years prior to your employer’s normal
determine your 457 plan limits.
lowable under the 403(b) plan so she has no
retirement age can be more than the general
unused contributions and cannot use the
limit.
Definition of 457 plan. A 457 plan is a non-
catch-up limit.
qualified, deferred compensation plan estab-
Normal retirement age. Your employer’s nor-
However, if Jessica had deferred nothing
lished by state and local governments and
mal retirement age is generally set by the plan. If
under the 457 plan and $2,500 under the 403(b)
tax-exempt employers. In many cases, employ-
no normal retirement age has been specified in
plan, she would have unused contributions, and
ers that allow employees to participate in 403(b)
the plan, then your normal retirement age is the
plans also offer 457 plans to their employees.
would therefore be eligible to use the 457
latest of:
Before 2002, if you participated in both a
catch-up limit.
•
403(b) plan and a 457 plan, the 457 plan limits
Age 65, or
applied to the total combined contributions
•
The latest age specified in your
under both plans. This means that the total con-
employer’s basic pension plan.
tributed to both your 403(b) account and your
Excess 457
457 account for the year could not be more than
the 457 plan limits.
Contributions
Maximum contribution. Under the catch-up
limit, the most that can be contributed to your
457 account for a year is the lesser of:
If there are excess contributions in the year you
contribute to both a 457 plan and a 403(b) plan,
Contribution Limits
1) $15,000, or
the contributions are considered excess 457
2) The sum of the following two amounts:
contributions.
The maximum amount that could be contributed
If you have an excess 457 contribution, con-
is determined using either the general limit or the
a) The general limit for the year for which
catch-up limit.
you are figuring the catch-up limit, plus
tact your plan administrator.
Chapter 8 Contributing to Both a 403(b) Plan and a 457 Plan
Page 17
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