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457 & Child Credit


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#1 bobwhitesr

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Posted 12 March 2015 - 08:14 AM

Hi,

 

My gross income is just above 110K and is starting to cut into my child tax credit.  I know that tax deferred contributions to a 403b can lower my adjusted gross income in order to get the full child tax credit.

 

Is the same true of the 457?  Will tax deferred (pre-tax) contirbutions to a 457 effectively lower my adjusted gross income with respect to the child tax credit ceiling?

 

Also, is it true that contributions I make to my pension plan are NOT counted towards my gross income for the purposes of determining my qualification for the child tax credit?

 

Any help at all is apprecaited.  Thank you!

 

 



#2 tony

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Posted 17 March 2015 - 09:28 PM

Bob

 

I'm no expert but the 457 should working pretty much like your 403b does. I'm currently in a 457. It works exactly the sames as a 403b does in reducing your gross income.



#3 bobwhitesr

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Posted 21 March 2015 - 09:05 AM

Tony,

 

Thanks for the reply.

 

Have you filed taxes and had it work that way?  It certainly seems correct as you state it.  I just don't want to find out after the fact that I lost my child tax credit.

 

Bob



#4 tony

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Posted 22 March 2015 - 09:32 PM

Also, is it true that contributions I make to my pension plan are NOT counted towards my gross income for the purposes of determining my qualification for the child tax credit?

 

Bob 

 

I would call the IRS and present your exact scenario to them. One you get one rep's answer call again and talk to a different rep. If both give you the same answer then usually its correct. Well maybe you better call three times. I've gotten different answers in the past.

 

It just seems to me if you are deferring income then you don't have it. It should not be considered in your Tax Credit situation against you.

Usually a program like turbotax would be able to show you how Child Credit/ 403b/ 457 relationship works out. I always use turbotax. I can then go back and look at the forms it fill out automatically. I've learned from doing that. Turbo tax also has a tax question blog where some smart people chime in. If nothing else call an accountant.

 

Tony