SECURE 2.0 signed into law December 29, 2022 focuses on significant changes for section 403b tax-sheltered annuity plans 403b plans. 403b plans are similar to 401a tax-qualified defined contribution plans subject to unique requirements under the Internal Revenue Code.
Self Employed Ministers’ 403(b) Contributions’ Effect on Compensation
Experts from Groom Law Group and Cammack Retirement Group answer questions concerning retirement plan administration and regulations.
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We are a church denominational 403(b)(9) plan which has not elected to be covered by the Employee Retirement Income Security Act (ERISA). Our participants include self-employed ministers. In Publication 571,
Tax-Sheltered Annuity Plans (403(b) Plans), the IRS instructs self-employed ministers that their includible compensation is net earnings from ministry minus contributions made to the retirement plan and the deductible portion of their self-employment tax. If the minister makes designated Roth or after-tax contributions to their 403(b) account do those contributions reduce includible compensation since these contributions do not reduce taxable income?”