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steves

457(B) - Question

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Hi, I am new to the forum. Can anyone help me with the following?

I work for NYC Local Government. I started my contribution to 457(b)in March 2011. I reside in PA (East Stroudsburg - Monroe County). I file taxes for the two states - NY and PA. Do I have to report the contribution I made to my 457 plan on my PA income Tax? I know for NY, it is exempt from the State taxes. I am not sure about PA. I was always told to report the amount listed in Box 5 on my w2. But the box 5 (Medicare Wages) includes all the contributions.

 

I called PA income tax services, twice, I received conflicting info. One said it's exempt and the second time I called, the rep said "it is". At least the people that I spoke with, they have no idea about the 457 plan even though I informed them what was listed in Box 12 "code G".

I do contribute to 403b and 457b. I know the 403b is taxable in PA. I just don't know about the 457b.

Thank you in advance.

 

Steve

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I am no tax expert, but here is what I know. 457b, 401k, 403b are tax deferred in all states. You do not pay taxes on the tax deferred money, but this money is not exempt forever. You will pay taxes eventually when you take it out in retirement, or when you reach 70.5 years old. Whether you have to report that on the tax form, you report taxable income. Tax deferred accounts are not taxable until you take it out.

I would advise that you talk with a tax expert on any tax matter.

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Guest Joel L. Frank

I am no tax expert, but here is what I know. 457b, 401k, 403b are tax deferred in all states. You do not pay taxes on the tax deferred money, but this money is not exempt forever. You will pay taxes eventually when you take it out in retirement, or when you reach 70.5 years old. Whether you have to report that on the tax form, you report taxable income. Tax deferred accounts are not taxable until you take it out.

I would advise that you talk with a tax expert on any tax matter.

 

 

These salary reduction plans are tax-deferred on the Federal level. When it comes to doing your state return you must know the law for your state. In NJ, for example, all of the contributions made to all of the plans mentioned is taxable except for contributions made to a 401(k) plan. One must check with the taxing authority in his/her state.

 

Having said all that Steves is a resident of PA and works in NY. He pays NY a non-resident income tax and that tax is a credit on his resident PA return. The rates in NY are higher than PA so he most probably owes nothing to PA. I would call the 457 plan for the employees of PA. They must know if the contribution is taxable in PA

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I am no tax expert, but here is what I know. 457b, 401k, 403b are tax deferred in all states. You do not pay taxes on the tax deferred money, but this money is not exempt forever. You will pay taxes eventually when you take it out in retirement, or when you reach 70.5 years old. Whether you have to report that on the tax form, you report taxable income. Tax deferred accounts are not taxable until you take it out.

I would advise that you talk with a tax expert on any tax matter.

 

 

These salary reduction plans are tax-deferred on the Federal level. When it comes to doing your state return you must know the law for your state. In NJ, for example, all of the contributions made to all of the plans mentioned is taxable except for contributions made to a 401(k) plan. One must check with the taxing authority in his/her state.

 

Having said all that Steves is a resident of PA and works in NY. He pays NY a non-resident income tax and that tax is a credit on his resident PA return. The rates in NY are higher than PA so he most probably owes nothing to PA. I would call the 457 plan for the employees of PA. They must know if the contribution is taxable in PA

 

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I am no tax expert, but here is what I know. 457b, 401k, 403b are tax deferred in all states. You do not pay taxes on the tax deferred money, but this money is not exempt forever. You will pay taxes eventually when you take it out in retirement, or when you reach 70.5 years old. Whether you have to report that on the tax form, you report taxable income. Tax deferred accounts are not taxable until you take it out.

I would advise that you talk with a tax expert on any tax matter.

 

 

These salary reduction plans are tax-deferred on the Federal level. When it comes to doing your state return you must know the law for your state. In NJ, for example, all of the contributions made to all of the plans mentioned is taxable except for contributions made to a 401(k) plan. One must check with the taxing authority in his/her state.

 

Having said all that Steves is a resident of PA and works in NY. He pays NY a non-resident income tax and that tax is a credit on his resident PA return. The rates in NY are higher than PA so he most probably owes nothing to PA. I would call the 457 plan for the employees of PA. They must know if the contribution is taxable in PA

 

 

Hi everyone,

Thank you for your responses. As I mentioned, I called my state (PA) and asked the same question regarding the 457, they don't seem to know or heard about the 457 plan. One said, it is not taxable and the other person I spoke with said it is taxable. Therefore, I am not sure who to believe. The way I see it, the state of PA wanted the money up front if I am not mistaken. Each time I call, they tell me to report the amount listed in Box 5 of my w2.

I even called my county tax managed by Berkheimer, their answer is "whatever you report to the state, you must report in you local as well."

Thank you again for your answers in advance.

Steves

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Guest Joel L. Frank

Did you call the 457 Plan for PA. employees and pose the question to them?

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Guest Joel L. Frank

As of this transmission the PA 457 plan is researching the question: ARE 457 CONTRIBUTIONS TAXABLE INCOME IN PA.?

 

I gave my particulars and the rep said she will get back to me.

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Guest Joel L. Frank

Here is your answer: 457(b) contributions are taxable income in PA. Just go to Page 12 (upper left) in the instruction booklet labeled PA-40.

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Here is your answer: 457(b) contributions are taxable income in PA. Just go to Page 12 (upper left) in the instruction booklet labeled PA-40.

 

Thank Joel for the info.

Indeed, I emailed PA Tax services, I received an answer yesterday which agrees with your answer. I guess PA wants their money up front. Forgot about the wording of Tax deferred.

Thank you again,

Steves

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