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lmenozzi

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  1. Thanks again John - here is my understanding (before i cut and paste this to the payroll company...) 457b deferrals are subject to FICA and Medicare just like normal employee wages. It does not matter if the company puts the money in on behalf of the employee or if the employee makes a deferral election from their own pay. Either way, the employee pays half of the FICA/Medicare and the Employer pays half. The deferral amount is included in wages reported in the boxes for social security and medicare, it is not included in the box used for taxable income (box 1), thus it's not subject to Federal Income tax. The amount should also be reported in box 12, code g.
  2. Thanks John - your expertise is much appreciated! Just to clarify, it should not be treated as salary though, correct, as it is not subject to federal tax? Just want to make sure i explain this thoroughly to the payroll co. as they have been giving me the big runaround.
  3. i am currently fighting with our payroll processor with regards to the proper way to report a 457b on an employee's w2. we are a 501c6 non-profit and established a trust under deferred compensation 457b plan several years ago. one employee (our president) is in the 457b plan. Annually the Board approves a contribution to the plan on his behalf. many years ago, the payroll company set up 2 codes, one that brings the amount of the contribution into the president's pay (so it will hit box 12, code g) and the other code takes it out so it is not part of taxable income... now they are challenging that treatment (10 years later) and i am not an expert... i am not sure if it is included in the medicare/fica calc... please help!!
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