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"includable Compensation"

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In the 457 FAQs, "Can an employee contribute to a 457b and a 403b?", the answer indicates that an employee can contribute, say $18,000 to a 457 Plan and $18,000 to a 403b Plan if older than age 50 and have "enough includable compensation."


How is "enough includable compensation" defined?


Did EGTRRA eliminate all percentage limitations on contributions to these plans?


Since the inception of EGTRRA, has the IRS been "scrutinizing" these contributions? If so, what flags are they looking for and what have they penalized?


We began contributing to the Wash. State Deferred Compensation Plan last year and would like to contribute (in 2005) to both that plan and a 403b plan that we did not contribute to in 2004.

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Guest Sierra

From the Calhoun law group



Type of Limitation 2005


Elective Deferrals (401(k) and 403(b); not including adjustments and catch-ups) $14,000


457(b)(2) and 457©(1) Limits (not including catch-ups) $14,000


Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans 3/ $4,000





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Rboomer, the new law did indeed eliminate the percentage limits on contributions to these plans. If I'm not mistaken, the phrasing of the limits now is "$14,000 or 100% of compensation, whichever is lesser," which I interpret to mean that you can defer $14,000 into a 403(b) as long as you make that much. Same for the $4,000 catch-up contributions. And you can contribute to the maximum in both a 403(b) and a 457, if you have both available to you.

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