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            Department of the Treasury
            Internal Revenue Service
                                                         Future Developments
                                                         For  the  latest  information  about  developments  related  to 
Publication 571                                          Pub.  571,  such  as  legislation  enacted  after  it  was 
(Rev. January 2024)                                      published, go to IRS.gov/Pub571.
Cat. No. 46581C

                                                         What’s New for 2023
Tax-Sheltered
                                                         Retirement  savings  contributions  credit.                     For  2023, 
                                                         the adjusted gross income limitations have increased from 
Annuity Plans                                            $68,000  to  $73,000  for  married  filing  jointly  filers;  from 
                                                         $51,000 to $54,750 for head of household filers; and from 
                                                         $34,000 to $36,500 for single, married filing separately, or 
(403(b) Plans)                                           qualifying  surviving  spouse  with  dependent  child  filers. 
                                                         See chapter 10,  Retirement Savings Contributions Credit 
                                                         (Saver's Credit), for additional information.
For Employees of Public 
                                                         De minimis financial incentives.        For plan years begin-
Schools and Certain                                      ning  after  December  29,  2022,  section  113  of  the  SE-
                                                         CURE 2.0 Act of 2022 permits employers to offer their em-
Tax-Exempt                                               ployees  de  minimis  financial  incentives  if  they  make 
                                                         elective deferrals.
Organizations
                                                         Limit on elective deferrals.            For 2023, the limit on elec-
                                                         tive deferrals has increased from $20,500 to $22,500.
                                                         Limit  on  annual  additions.           For  2023,  the  limit  on  an-
                                                         nual additions has increased from $61,000 to $66,000.
                                                         Designated  Roth  nonelective  contributions.                   Section 
                                                         604 of the SECURE 2.0 Act of 2022 permits certain non-
                                                         elective  contributions  that  are  made  after  December  29, 
                                                         2022, to be designated as Roth contributions.

                                                         What’s New for 2024
                                                         Retirement  savings  contributions  credit.                     For  2024, 
                                                         the adjusted gross income limitations have increased from 
                                                         $73,000  to  $76,500  for  married  filing  jointly  filers;  from 
                                                         $54,750 to $57,375 for head of household filers; and from 
                                                         $36,500 to $38,250 for single, married filing separately, or 
                                                         qualifying  surviving  spouse  with  dependent  child  filers. 
                                                         See chapter 10,  Retirement Savings Contributions Credit 
                                                         (Saver's Credit), for additional information.
                                                         Limit on elective deferrals.            For 2024, the limit on elec-
                                                         tive deferrals has increased from $22,500 to $23,000.
                                                         Limit  on  annual  additions.           For  2024,  the  limit  on  an-
                                                         nual additions has increased from $66,000 to $69,000.
                                                         Distributions for emergency personal expenses.                  For 
                                                         distributions  made  after  December  31,  2023,  an  emer-
                                                         gency personal expense distribution may be made from a 
                                                         403(b) plan and is not subject to the 10% additional tax on 
                                                         early distributions. An emergency personal expense distri-
                                                         bution  is  a  distribution  made  from  your  403(b)  plan  (or 
                                                         other  applicable  eligible  retirement  plan)  that  is  used  for 
                                                         purposes of meeting unforeseeable or immediate financial 
Get forms and other information faster and easier at:    needs  relating  to  necessary  personal  for  family  emer-
• IRS.gov (English)    • IRS.gov/Korean (한국어)            gency  expenses.  There  are  certain  limits  that  apply  for 
• IRS.gov/Spanish (Español)  • IRS.gov/Russian (Pусский) emergency  personal  expense  distributions  (one  per 
• IRS.gov/Chinese (中文) • IRS.gov/Vietnamese (Tiếng Việt) 
                                                         calendar  year,  dollar  limits  of  generally  not  more  than 

Jan 16, 2024

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$1,000, and limits on subsequent distributions). You may
repay an emergency personal expense distributions at
Introduction
any time during the 3-year period beginning on the day af-
ter the date on which you received the distribution. This publication can help you better understand the tax
Distributions to a domestic abuse victim. For distri- rules that apply to your 403(b) (tax-sheltered annuity)
butions made after December 31, 2023, a distribution to a plan.
domestic abuse victim may be made from a 403(b) plan In this publication, you will find information to help you
and is not subject to the 10% additional tax on early distri- do the following.
butions. A distribution to a domestic abuse victim is a dis- • Determine the maximum amount that can be contrib-
tribution made from your 403(b) plan (or other applicable uted to your 403(b) account in 2024.
eligible retirement plan) that is no greater than $10,000
(indexed for inflation) and is made during the 1-year pe- • Determine the maximum amount that could have been
riod beginning on any date on which you are the victim of contributed to your 403(b) account in 2023.
domestic abuse by a spouse or domestic partner. You • Identify excess contributions.
may repay this distribution at any time during the 3-year
period beginning on the day after the date on which you • Understand the basic rules for claiming the retirement
received the distribution. savings contributions credit.
• Understand the basic rules for distributions and roll-
overs from 403(b) accounts.
Reminders This publication doesn’t provide specific information on
the following topics.
Qualified disaster recovery distributions. A qualified
• Distributions from 403(b) accounts. This is covered in
disaster recovery distribution is a qualified disaster distri-
Pub. 575, Pension and Annuity Income.
bution that meets certain criteria as described in the SE-
CURE 2.0 Act of 2022. It is a distribution made from an eli- • Rollovers. This is covered in Pub. 590-A, Contributions
gible retirement plan to an individual whose main home to Individual Retirement Arrangements (IRAs), and
was in a qualified disaster area. You must have sustained Pub. 590-B, Distributions from Individual Retirement
an economic loss because of the disaster to receive distri- Arrangements (IRAs).
bution. For more information, see Pub. 575.
How to use this publication. This publication is organ-
Repayment of qualified COVID-19 distributions.
ized into chapters to help you find information easily.
Generally, you may repay any portion of a qualified
Chapter 1 answers questions frequently asked by
COVID-19 distribution that is eligible for tax-free rollover
403(b) plan participants.
treatment to an eligible retirement plan. You have 3 years
Chapters 2 through explain the rules and terms you 6
from the day after the date you received a qualified
need to know to figure the maximum amount that could
COVID-19 distribution to make a repayment. The amount
have been contributed to your 403(b) account for 2023
of your repayment can't be more than the amount of the
and the maximum amount that can be contributed to your
original distribution. Amounts that are repaid are treated
403(b) account in 2024.
as a trustee-to-trustee transfer and are not included in in-
Chapter 7 provides general information on the preven-
come.
tion and correction of excess contributions to your 403(b)
Income inclusion over 3-year period. You may choose account.
to have qualified COVID-19 distributions included in in- Chapter 8 provides general information on distributions,
come in equal amounts over 3 years. However, if you transfers, and rollovers.
elect, you can include the entire distribution in your in- Chapter 9 provides blank worksheets that you will need
come in the year it was received. to accurately and actively participate in your 403(b) plan.
More information. See Pubs. 575, 590-A, and 590-B for Filled-in samples of most of these worksheets can be
more information on new rules as a result of P.L. 116-136 found throughout this publication.
that provide for tax-favored withdrawals, income inclusion, Chapter 10 explains the rules for claiming the retire-
and repayments for individuals who were diagnosed with ment savings contributions credit (saver's credit).
or suffered economic losses as a result of COVID-19.
Comments and suggestions. We welcome your com-
Photographs of missing children. The IRS is a proud
ments about this publication and suggestions for future
partner with the National Center for Missing & Exploited
editions.
Children® (NCMEC). Photographs of missing children se-
You can send us comments through IRS.gov/
lected by the Center may appear in this publication on pa-
FormComments. Or, you can write to the Internal Revenue
ges that would otherwise be blank. You can help bring
Service, Tax Forms and Publications, 1111 Constitution
these children home by looking at the photographs and
Ave. NW, IR-6526, Washington, DC 20224.
calling 1-800-THE-LOST (1-800-843-5678) if you recog-
Although we can’t respond individually to each com-
nize a child.
ment received, we do appreciate your feedback and will
consider your comments and suggestions as we revise
our tax forms, instructions, and publications. Don’t send

2 Publication 571 (1-2024)

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tax questions, tax returns, or payments to the above ad-                  • What are the benefits of contributing to a 403(b) plan?
dress.                                                                      Who can participate in a 403(b) plan?
                                                                          •
Getting answers to your tax questions.      If you have                   • Who can set up a 403(b) account?
a tax question not answered by this publication or the                How 
To Get Tax Help section at the end of this publication, go                • How can contributions be made to my 403(b) ac-
to  the  IRS  Interactive  Tax  Assistant  page  at IRS.gov/                count?
Help/ITA  where  you  can  find  topics  by  using  the  search           • Do I report contributions on my tax return?
feature or by viewing the categories listed.
                                                                          • How much can be contributed to my 403(b) account?
Getting  tax  forms,  instructions,  and  publications. 
Go to IRS.gov/Forms to download current and prior-year 
forms, instructions, and publications.
                                                                          What Is a 403(b) Plan?
Ordering tax forms, instructions, and publications. 
Go to IRS.gov/OrderForms to order current forms, instruc-                 A  403(b)  plan,  also  known  as  a  tax-sheltered  annuity 
tions,  and  publications;  call  800-829-3676  to  order                 (TSA) plan, is a retirement plan for certain employees of 
prior-year  forms  and  instructions.  The  IRS  will  process            public schools, employees of certain tax-exempt organiza-
your order for forms and publications as soon as possible.                tions, and certain ministers.
Don’t resubmit requests you've already sent us. You can                    Individual accounts in a 403(b) plan can be any of the 
get forms and publications faster online.                                 following types.
                                                                          • An annuity contract, which is a contract provided 
Useful Items                                                                through an insurance company.
You may want to see:
                                                                          • A custodial account, which is an account invested in 
Publication                                                                 mutual funds.
    517 517 Social Security and Other Information for                     • A retirement income account set up for church em-
        Members of the Clergy and Religious Workers                         ployees. Generally, retirement income accounts can 
                                                                            invest in either annuities or mutual funds.
    575 575 Pension and Annuity Income                                     We use the term “403(b) account” to refer to any one of 
    590-A        590-A Contributions to Individual Retirement             these  funding  arrangements  throughout  this  publication, 
        Arrangements (IRAs)                                               unless otherwise specified.
    590-B        590-B Distributions from Individual Retirement 
        Arrangements (IRAs)
                                                                          What Are the Benefits of 
Form (and Instructions)
                                                                          Contributing to a 403(b) Plan?
    W-2 W-2 Wage and Tax Statement
    1099-R             1099-R Distributions From Pensions, Annuities,     There are three benefits to contributing to a 403(b) plan.
        Retirement or Profit-Sharing Plans, IRAs,                         • The first benefit is that you don’t pay income tax on al-
        Insurance Contracts, etc.                                           lowable contributions until you begin making withdraw-
    5329    5329 Additional Taxes on Qualified Plans (Including             als from the plan, usually after you retire. Allowable 
        IRAs) and Other Tax-Favored Accounts                                contributions to a 403(b) plan are either excluded or 
                                                                            deducted from your income. However, if your contribu-
    5330    5330 Return of Excise Taxes Related to Employee                 tions are made to a Roth contribution program, this 
        Benefit Plans                                                       benefit doesn’t apply. Instead, you pay income tax on 
    8880    8880 Credit for Qualified Retirement Savings                    the contributions to the plan but distributions from the 
        Contributions                                                       plan (if certain requirements are met) are tax free.
                                                                            Note. Generally, employees must pay social secur-
                                                                            ity and Medicare tax on their contributions to a 403(b) 
                                                                            plan,  including  those  made  under  a  salary  reduction 
                                                                            agreement. See chapter 4, Limit on Elective Deferrals, 
                                                                            for more information.
1.                                                                        • The second benefit is that earnings and gains on 
                                                                            amounts in your 403(b) account aren’t taxed until you 
                                                                            withdraw them. Earnings and gains on amounts in a 
403(b) Plan Basics                                                          Roth contribution program aren’t taxed if your with-
                                                                            drawals are qualified distributions. Otherwise, they are 
This chapter introduces you to 403(b) plans and accounts.                   taxed when you withdraw them.
Specifically, the chapter answers the following questions.
                                                                          • The third benefit is that you may be eligible to take a 
• What is a 403(b) plan?                                                    credit for elective deferrals contributed to your 403(b) 

Publication 571 (1-2024)                    Chapter 1                 403(b) Plan Basics                                            3

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account. See chapter 10, Retirement Savings Contri- section 501(c)(3) organizations and they are employed as
butions Credit (Saver's Credit), for more information. ministers.
Excluded. If an amount is excluded from your income, Universal availability. Generally, all eligible employ-
it isn’t included in your total wages on your Form W-2. This ees (with certain exceptions) of an employer must be per-
means that you don’t report the excluded amount on your mitted to make elective deferrals (including Roth elective
tax return. deferrals) if any employee of the employer may make elec-
tive deferrals. If your employer offers a 403(b) plan, you
Deducted. If an amount is deducted from your in-
should have received information about your eligibility to
come, it is included with your other wages on your Form
participate.
W-2. You report this amount on your tax return, but you are
allowed to subtract it when figuring the amount of income
on which you must pay tax.
Who Can Set up a 403(b)

Account?
Who Can Participate in a
You can’t set up your own 403(b) account. Only employers
403(b) Plan? can set up 403(b) accounts. A self-employed minister
can’t set up a 403(b) account for its own benefit. If you are
Any eligible employee can participate in a 403(b) plan.
a self-employed minister, only the organization (denomi-
Eligible employees. The following employees are eligi- nation) with which you are associated can set up an ac-
ble to participate in a 403(b) plan. count for your benefit.
• Employees of tax-exempt organizations established
under section 501(c)(3). These organizations are usu-
ally referred to as “section 501(c)(3) organizations” or How Can Contributions Be
simply “501(c)(3) organizations.”
• Employees of public school systems who are involved Made to My 403(b) Account?
in the day-to-day operations of a school.
Generally, only your employer can make contributions to
• Employees of cooperative hospital service organiza- your 403(b) account. However, some plans will allow you
tions. to make after-tax contributions (defined below).
• Civilian faculty and staff of the Uniformed Services The following types of contributions can be made to
University of the Health Sciences. 403(b) accounts.
• Employees of public school systems organized by In-
1. Elective deferrals. These are contributions made un-
dian tribal governments who are involved in the
der a salary reduction agreement. This agreement al-
day-to-day operations of a school.
lows your employer to withhold money from your pay-
• Certain ministers (explained next). check to be contributed directly into a 403(b) account
Ministers. The following ministers are eligible employ- for your benefit. Except for Roth contributions, you
ees for whom a 403(b) account can be established. don’t pay income tax on these contributions until you
withdraw them from the account. If your contributions
1. Ministers employed by section 501(c)(3) organiza- are Roth contributions, you pay taxes on your contri-
tions. butions but any qualified distributions from your Roth
2. Self-employed ministers. A self-employed minister is account are tax free.
treated as employed by a tax-exempt organization 2. Nonelective contributions. These are employer
that is an eligible employer. contributions that aren’t made under a salary reduc-
3. Ministers (chaplains) who meet both of the following tion agreement. Nonelective contributions include
requirements. matching contributions, discretionary contributions,
and mandatory contributions made by your employer.
a. They are employed by organizations that aren’t Except for Roth nonelective contributions, you don't
section 501(c)(3) organizations. pay income tax on these contributions until you with-
b. They function as ministers in their day-to-day pro- draw them from the account. If your nonelective con-
fessional responsibilities with their employers. tributions are designated as Roth contributions, you
pay taxes on your contributions, but any qualified dis-
Throughout this publication, the term “chaplain” will be tributions from your Roth account are tax free.
used to mean ministers described in the third category in
the list above. 3. After-tax contributions. These are contributions
(that aren’t Roth contributions) you make with funds
Example. A minister employed as a chaplain by a that you must include in income on your tax return. A
state-run prison and a chaplain in the U.S. Armed Forces salary payment on which income tax has been with-
are eligible employees because their employers aren’t held is a source of these contributions. If your plan

4 Chapter 1 403(b) Plan Basics Publication 571 (1-2024)

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allows you to make after-tax contributions, they aren’t
excluded from income and you can’t deduct them on
your tax return. 2.
4. A combination of any of the three contribution types
listed above.
Maximum Amount
Self-employed minister. If you are a self-employed min-
ister, you are considered both an employee and an em- Contributable (MAC)
ployer, and you can contribute to a retirement income ac-
count for your own benefit. Throughout this publication, the limit on the amount that
can be contributed to your 403(b) account for any year is
referred to as your maximum amount contributable (MAC).
This chapter:
Do I Report Contributions on
• Introduces the components of your MAC,
My Tax Return?
• Tells you how to figure your MAC, and
Generally, you don’t report contributions to your 403(b) ac- • Tells you when to figure your MAC.
count (except Roth contributions) on your tax return. Your
employer will report contributions on your 2023 Form W-2.
Elective deferrals will be shown in box 12 with code E for
pre-tax amounts and code BB for Roth amounts, and the Components of Your MAC
Retirement plan box will be checked in box 13. If you are a
Generally, before you can determine your MAC, you must
self-employed minister or chaplain, see the discussions
first figure the components of your MAC. The components
next.
of your MAC are:
Self-employed ministers. If you are a self-employed • The limit on annual additions (chapter 3), and
minister, you must report the total contributions as a de-
duction on your tax return. Deduct your contributions on • The limit on elective deferrals (chapter 4).
line 16 of the 2023 Schedule 1 (Form 1040).

Chaplains. If you are a chaplain and your employer How Do I Figure My MAC?
doesn’t exclude contributions made to your 403(b) ac-
count from your earned income, you may be able to take a Generally, contributions to your 403(b) account are limited
deduction for those contributions on your tax return. to the lesser of:
However, if your employer has agreed to exclude the
contributions from your earned income, you won’t be al- • The limit on annual additions, or
lowed a deduction on your tax return. • The limit on elective deferrals.
If you can take a deduction, include your contributions
on line 24g of the 2023 Schedule 1 (Form 1040). Depending upon the type of contributions made to your
403(b) account, only one of the limits may apply to you.

Which limit applies. Whether you must apply one or
How Much Can Be Contributed both of the limits depends on the type of contributions
made to your 403(b) account during the year.
to My 403(b) Account?
Elective deferrals only. If the only contributions made
There are limits on the amount of contributions that can be to your 403(b) account during the year were elective defer-
made to your 403(b) account each year. If contributions rals made under a salary reduction agreement, you will
made to your 403(b) account are more than these contri- need to figure both of the limits. Your MAC is the lesser of
bution limits, penalties may apply. the two limits.
Chapters 2 through provide information on how to de-6 Nonelective contributions only. If the only contribu-
termine the amount that can be contributed to your 403(b) tions made to your 403(b) account during the year were
account. nonelective contributions (employer contributions not
made under a salary reduction agreement), you will only
Worksheets are provided in chapter 9 to help you deter-
need to figure the limit on annual additions. Your MAC is
mine the maximum amount that can be contributed to your
the limit on annual additions.
403(b) account each year. Chapter 7, Excess Contribu-
tions, describes how to prevent excess contributions and Elective deferrals and nonelective contributions. If
how to get an excess contribution corrected. the contributions made to your 403(b) account were a
combination of both elective deferrals made under a sal-
ary reduction agreement and nonelective contributions
(employer contributions not made under a salary

Publication 571 (1-2024) Chapter 2 Maximum Amount Contributable (MAC) 5

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reduction agreement), you will need to figure both limits. your limit on annual additions or use different rules when
Your MAC is the limit on the annual additions. figuring your limit on annual additions. For more informa-
tion, see chapter 5.
Catch-up contributions. If you are age 50 or older,
you may be able to make additional catch-up contribu- Participation in a qualified plan. If you participated
tions, which are explained in chapter 6. in a 403(b) plan and a qualified plan, you must combine
You need to figure the limit on elective deferrals to de- contributions made to your 403(b) account with contribu-
termine if you have excess elective deferrals, which are tions to a qualified plan and simplified employee pensions
explained in chapter 7. of all corporations, partnerships, and sole proprietorships
in which you have more than 50% control to determine the
Worksheets. Worksheets are available in chapter 9 to total annual additions.
help you figure your MAC. You can use Part I of Worksheet 1 in chapter 9 to figure
your limit on annual additions.

When Should I Figure My
Includible Compensation for
MAC?
Your Most Recent Year of
At the beginning of 2024, you should refigure your 2023
MAC based on your actual compensation for 2023. This Service
will allow you to determine if the amount that has been
contributed to your 403(b) account for 2023 has exceeded Definition. Generally, includible compensation for your
the allowable limits. In some cases, this will allow you to most recent year of service is the amount of taxable wa-
avoid penalties and additional taxes. See chapter 7. ges and benefits you received from the employer that
Generally, you should figure your MAC for the current maintained a 403(b) account for your benefit during your
year at the beginning of each tax year using a conserva- most recent year of service.
tive estimate of your compensation. If your compensation
changes during the year, you should refigure your MAC When figuring your includible compensation for your
based on a revised conservative estimate. By doing this, most recent year of service, keep in mind that your most
you will be able to determine if contributions to your 403(b) recent year of service may not be the same as your em-
account can be increased or should be decreased for the ployer's most recent annual work period. This can happen
year. if your tax year isn’t the same as your employer's annual
work period.
When figuring includible compensation for your most
recent year of service, don’t mix compensation or service
of one employer with compensation or service of another
employer.
3.
Most Recent Year of Service

Limit on Annual Additions Your most recent year of service is your last full year of
service, ending on the last day of your tax year that you
The first component of MAC is the limit on annual addi- worked for the employer that maintained a 403(b) account
tions. This is a limit on the total contributions (elective de- on your behalf.
ferrals, nonelective contributions, and after-tax contribu-
tions) that can be made to your 403(b) account. The limit Tax year different from employer's annual work pe-
on annual additions is generally the lesser of: riod. If your tax year isn’t the same as your employer's
annual work period, your most recent year of service is
• $66,000 for 2023 and $69,000 for 2024, or
made up of parts of at least two of your employer's annual
• 100% of your includible compensation for your most work periods.
recent year of service.
Example. A professor who reports income on a calen-
More than one 403(b) account. If you contrib-
dar-year basis is employed on a full-time basis by a uni-
! uted to more than one 403(b) account, you must versity that operates on an academic year (October
CAUTION combine the contributions made to all 403(b) ac-
through May). To figure the includible compensation for
counts maintained by your employer. If you participate in
2023, the professor's most recent year of service is from
more than one 403(b) plan maintained by different em-
January through May 2023 and from October through De-
ployers, you don’t need to combine amounts for annual
cember 2023.
addition limits.

Ministers and church employees. If you are a minis-
ter or a church employee, you may be able to increase

6 Chapter 3 Limit on Annual Additions Publication 571 (1-2024)

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Figuring Your Most Recent Year of Service • Amounts contributed or deferred by your employer un-
der a section 125 cafeteria plan.
To figure your most recent year of service, begin
by determining what is a full year of service for • Amounts contributed or deferred, at the election of the
your position. A full year of service is equal to employee, under an eligible section 457 nonqualified
full-time employment for your employer's annual work pe- deferred compensation plan (state or local govern-
riod. ment or tax-exempt organization plan).
Note. For information about treating elective deferrals
After identifying a full year of service, begin counting under section 457 plans as Roth contributions, see
the service you have provided for your employer starting Pub. 575.
with the service provided in the current year. • Wages, salaries, and fees for personal services
earned with the employer maintaining your 403(b) ac-
Part-time or employed only part of the year. If you are count.
a part-time or a full-time employee who is employed for
only part of the year, your most recent year of service is • Income otherwise excluded under the foreign earned
your service this year and your service for as many previ- income exclusion.
ous years as is necessary to total 1 full year of service. To • Pre-tax contributions (employer's contributions made
determine your most recent year of service, add the fol- on your behalf according to your election) to a quali-
lowing periods of service. fied transportation fringe benefit plan.
• Your service during the year for which you are figuring Includible compensation does not include the following
the limit on annual additions. items.
• Your service during your preceding tax years until the
1. Your employer's contributions to your 403(b) account.
total service equals 1 year of service or you have fig-
ured all of your service with the employer. 2. Compensation earned while your employer wasn’t an
eligible employer.
Example. You were employed on a full-time basis
from July through December 2021 (1/2 year of service), 3. Your employer's contributions to a qualified plan that:
July through December 2022 (1/2 year of service), and a. Are on your behalf, and
October through December 2023 (1/4 year of service).
Your most recent year of service for figuring your limit on b. Are excludable from income.
annual additions for 2023 is the total of your service during 4. The cost of incidental life insurance. See Cost of Inci-
2023 (1/4 year of service), your service during 2022 (1/2 dental Life Insurance, later.
year of service), and your service during the months of
October through December 2021 (1/4 year of service). If you are a church employee or a foreign mission-
ary, figure includible compensation using the rules
Not yet employed for 1 year. If, at the close of the year, CAUTION! explained in chapter 5.
you haven’t yet worked for your employer for 1 year (in-
cluding time you worked for the same employer in all ear- Contributions after retirement. Nonelective contribu-
lier years), use the period of time you have worked for the tions may be made for an employee for up to 5 years after
employer as your most recent year of service. retirement. These contributions would be based on includ-
ible compensation for the last year of service before retire-
Includible Compensation ment.

After identifying your most recent year of service, the next Cost of Incidental Life Insurance
step is to identify the includible compensation associated
with that full year of service. Includible compensation doesn’t include the cost of inci-
Includible compensation isn’t the same as income in- dental life insurance.
cluded on your tax return. Compensation is a combination If all of your 403(b) accounts invest only in mutual
of income and benefits received in exchange for services ! funds, then you have no incidental life insurance.
provided to your employer. CAUTION
Generally, includible compensation is the amount of in-
come and benefits: If you have an annuity contract, a portion of the cost of
that contract may be for incidental life insurance. If so, the
• Received from the employer who maintains your cost of the insurance is taxable to you in the year contrib-
403(b) account, and uted and is considered part of your basis when distrib-
• It must be included in your income. uted. Your employer will include the cost of your insurance
as taxable wages in box 1 of Form W-2.
Includible compensation includes the following
amounts. Not all annuity contracts include life insurance. Contact
• Elective deferrals (employer's contributions made on your plan administrator to determine if your contract in-
your behalf under a salary reduction agreement). cludes incidental life insurance. If it does, you will need to

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figure the cost of life insurance each year the policy is in      Figure 3-1. Table of 1-Year Term Premiums 
effect.                                                           for $1,000 Life Insurance Protection
        Figuring the cost of incidental life insurance. 
                                                                  Age      Cost  Age         Cost        Age             Cost
        If you have determined that part of the cost of your 
        annuity contract is for an incidental life insurance      0. . . . $0.70 35    . . . $0.99     70. . .           $20.62
                                                                  1. . . . 0.41  36    . . . 1.01      71. . .           22.72
premium,  you  will  need  to  determine  the  amount  of  the    2. . . . 0.27  37    . . . 1.04      72. . .           25.07
premium  and  subtract  it  from  your  includible  compensa-     3. . . . 0.19  38    . . . 1.06      73. . .           27.57
tion.                                                             4. . . . 0.13  39    . . . 1.07      74. . .           30.18
                                                                  5. . . . 0.13  40    . . . 1.10      75. . .           33.05
  To  determine  the  amount  of  the  life  insurance  premi-    6. . . . 0.14  41    . . . 1.13      76. . .           36.33
                                                                  7. . . . 0.15  42    . . . 1.20      77. . .           40.17
ums, you will need to know the following information.             8. . . . 0.16  43    . . . 1.29      78. . .           44.33
• The value of your life insurance contract, which is the         9. . . . 0.16  44    . . . 1.40      79. . .           49.23
  amount payable upon your death.                                 10. . .  0.16  45    . . . 1.53      80. . .           54.56
                                                                  11. . .  0.19  46    . . . 1.67      81. . .           60.51
• The cash value of your life insurance contract at the           12. . .  0.24  47    . . . 1.83      82. . .           66.74
  end of the tax year.                                            13. . .  0.28  48    . . . 1.98      83. . .           73.07
                                                                  14. . .  0.33  49    . . . 2.13      84. . .           80.35
• Your age on your birthday nearest the beginning of the          15. . .  0.38  50    . . . 2.30      85. . .           88.76
  policy year.                                                    16. . .  0.52  51    . . . 2.52      86. . .           99.16
                                                                  17. . .  0.57  52    . . . 2.81      87. . .           110.40
• Your current life insurance protection under an ordi-           18. . .  0.59  53    . . . 3.20      88. . .           121.85
  nary retirement income life insurance policy, which is          19. . .  0.61  54    . . . 3.65      89. . .           133.40
  the amount payable upon your death minus the cash               20. . .  0.62  55    . . . 4.15      90. . .           144.30
  value of the contract at the end of the year.                   21. . .  0.62  56    . . . 4.68      91. . .           155.80
                                                                  22. . .  0.64  57    . . . 5.20      92. . .           168.75
  You can use Worksheet A in chapter 9 to determine the           23. . .  0.66  58    . . . 5.66      93. . .           186.44
cost of your incidental life insurance.                           24. . .  0.68  59    . . . 6.06      94. . .           206.70
                                                                  25. . .  0.71  60    . . . 6.51      95. . .           228.35
  Example.   Your new contract provides that your bene-           26. . .  0.73  61    . . . 7.11      96. . .           250.01
ficiary will receive $10,000 if you should die before retire-     27. . .  0.76  62    . . . 7.96      97. . .           265.09
                                                                  28. . .  0.80  63    . . . 9.08      98. . .           270.11
ment. Your cash value in the contract at the end of the first     29. . .  0.83  64    . . . 10.41     99. . .           281.05
year is zero. Your current life insurance protection for the      30. . .  0.87  65    . . . 11.90
first year is $10,000 ($10,000 − $0).                             31. . .  0.90  66    . . . 13.51
  The cash value in the contract at the end of year 2 is          32. . .  0.93  67    . . . 15.20
$1,000,  and  the  current  life  insurance  protection  for  the 33. . .  0.96  68    . . . 16.92
second year is $9,000 ($10,000 – $1,000).                         34. . .  0.98  69    . . . 18.70

  The 1-year cost of the protection can be calculated by                   If the current published premium rates per $1,000 
using Figure 3-1. The premium rate is determined based             !       of insurance protection charged by an insurer for 
on your age on your birthday nearest the beginning of the         CAUTION  individual  1-year  term  life  insurance  premiums 
policy year.                                                      available to all standard risks are lower than those in the 
                                                                  preceding  table,  you  can  use  the  lower  rates  for  figuring 
                                                                  the cost of insurance in connection with individual policies 
                                                                  issued by the same insurer.

                                                                   Example 1.    An employee, age 44, and the employer 
                                                                  enter into a 403(b) plan that will provide the employee with 
                                                                  a  $500  a  month  annuity  upon  retirement  at  age  65.  The 
                                                                  agreement also provides that if the employee should die 
                                                                  before retirement, the beneficiary will receive the greater 
                                                                  of  $20,000  or  the  cash  surrender  value  in  the  life  insur-
                                                                  ance  contract.  Using  the  facts  presented,  we  can  deter-
                                                                  mine the cost of the employee’s life insurance protection 
                                                                  as shown in Table 3-1.
                                                                   The employer has included $28 for the cost of the life 
                                                                  insurance  protection  in  the  employee’s  current  year  in-
                                                                  come.  When  figuring  includible  compensation  for  this 
                                                                  year, the employee will subtract $28.

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Table 3-1. Worksheet A. Cost of Incidental Example. Max has been periodically working full-time
Life Insurance for a local hospital since September 2021. Max needs to
figure the limit on annual additions for 2024. The hospital's
Note. Use this worksheet to figure the cost of incidental normal annual work period for employees in Max's general
life insurance included in your annuity contract. This type of work runs from January to December.
amount will be used to figure includible compensation for During the periods that Max was employed with the
your most recent year of service. hospital, the hospital has always been eligible to provide a
403(b) plan to employees. Additionally, the hospital has
1. Enter the value of the contract (amount
payable upon your death) . . . . . . . . . . . 1. $20,000.00 never provided the employees with a 457 deferred com-
pensation plan, a transportation fringe benefit plan, or a
2. Enter the cash value in the contract at the
end of the year. . . . . . . . . . . . . . . . . . 2. 0.00 cafeteria plan.
Max has never worked abroad and there is no life insur-
3. Subtract line 2 from line 1. This is the value ance provided under the plan.
of your current life insurance protection. . . 3. $20,000.00
Table 3-3 shows the service Max provided to the em-
4. Enter your age on your birthday nearest the ployer, compensation for the periods worked, elective de-
beginning of the policy year. . . . . . . . . . 4. 44
ferrals, and taxable wages.
5. Enter the 1-year term premium for $1,000
of life insurance based on your age. (From
Figure 3-1). . . . . . . . . . . . . . . . . . . . . 5. $1.40
Table 3-3. Max’s Compensation
6. Divide line 3 by $1,000. . . . . . . . . . . . . 6. 20
7. Multiply line 6 by line 5. This is the cost of Note.This table shows information Max will use to figure
your incidental life insurance . . . . . . . . . . 7. $28.00 includible compensation for the most recent year of
service.
Example 2. The employee’s cash value in the con-
tract at the end of the second year is $1,000. In year 2, the
Years of Taxable Elective
cost of the employee’s life insurance is figured as shown in Year
Service Wages Deferrals
Table 3-2.
6/12 of
In year 2, the employer will include $29.07 in the em- 2024 $42,000 $2,000
ployee’s current year income. The employee will subtract a year
this amount when figuring the includible compensation. 4/12 of
2023 $16,000 $1,650
a year
4/12 of
Table 3-2. Worksheet A. Cost of Incidental 2022 $16,000 $1,650
a year
Life Insurance
Before figuring the limit on annual additions, Max must
Note. Use this worksheet to figure the cost of incidental figure includible compensation for the most recent year of
life insurance included in your annuity contract. This service.
amount will be used to figure includible compensation for Because Max isn’t planning to work the entire 2024
your most recent year of service. year, Max’s most recent year of service will include the
1. Enter the value of the contract (amount time planning to work in 2024 plus time worked in the pre-
payable upon your death) . . . . . . . . . . . 1. $20,000.00 ceding 3 years until the time worked for the hospital totals
2. Enter the cash value in the contract at the 1 year. If the total time worked is less than 1 year, Max will
end of the year. . . . . . . . . . . . . . . . . . 2. $1,000.00 treat it as if it were 1 year. Max figures the most recent
3. Subtract line 2 from line 1. This is the value year of service shown in the following list.
of your current life insurance protection. . 3. $19,000.00 6 12
• Time Max will work in 2024 is / of a year.
4. Enter your age on your birthday nearest 4 12
the beginning of the policy year. . . . . . . 4. 45 • Time worked in 2023 is / of a year. All of this time
5. Enter the 1-year term premium for $1,000 will be used to determine Max's most recent year of
of life insurance based on your age. (From service.
Figure 3-1). . . . . . . . . . . . . . . . . . . . 5. $1.53 4 12
• Time worked in 2022 is / of a year. Max only needs
6. Divide line 3 by $1,000. . . . . . . . . . . . . 6. 19 2 months of the 4 months worked in 2022 to have
7. Multiply line 6 by line 5. This is the cost of enough time to total 1 full year. Because Max needs
your incidental life insurance . . . . . . . . . 7. $29.07 only / of the actual time worked, Max will use only /1 2 1 2
of income earned during that period to figure wages
that will be used in figuring the includible compensa-
Figuring Includible Compensation for Your tion.
Most Recent Year of Service
Using the information provided in Table 3-3, wages for
You can use Worksheet B in chapter 9 to deter- Max's most recent year of service are $66,000 ($42,000 +
mine your includible compensation for your most $16,000 + $8,000). Max’s includible compensation for the
recent year of service.

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                                                                                                                                                                       1
Table 3-4. Worksheet B. Includible Compensation for Your Most Recent Year of Service
           Note. Use this worksheet to figure includible compensation for your most recent year of service.
   1.  Enter your includible wages from the employer maintaining your 403(b) account for your most 
       recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          1.  $66,000
   2.  Enter elective deferrals excluded from your gross income for your most recent year of 
       service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2  2.    4,4753

   3.  Enter amounts contributed or deferred by your employer under a cafeteria plan for your most 
       recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          3.   -0-
   4.  Enter amounts contributed or deferred by your employer according to your election to your 457 
       account (a nonqualified plan of a state or local government or of a tax-exempt organization) for 
       your most recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  4.   -0-
   5.  Enter pre-tax contributions (employer's contributions made on your behalf according to your 
       election) to a qualified transportation fringe benefit plan for your most recent year of 
       service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.   -0-
   6.  Enter your foreign earned income exclusion for your most recent year of service . . . . . . . . . . . . .                                                   6.   -0-
   7.  Add lines 1, 2, 3, 4, 5, and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              7.   70,475
   8.  Enter the cost of incidental life insurance that is part of your annuity contract for your most recent 
       year of service  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      8.   -0-
   9.  Enter compensation that was both:
         • Earned during your most recent year of service, and
         • Earned while your employer wasn’t qualified to maintain a 403(b) plan . . . . . . . . . . . . . . . . . .                                               9.   -0-
   10. Add lines 8 and 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         10.  -0-
   11. Subtract line 10 from line 7. This is your includible compensation for your most recent year of 
       service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.  70,475
1 Use estimated amounts if figuring includible compensation before the end of the year.
2 Elective deferrals made to a designated Roth account aren’t excluded from your gross income and shouldn’t be included on this line.
3 $4,475 ($2,000 + $1,650 + $825).

most  recent  year  of  service  is  figured  as  shown  in Ta- $69,000,  the  lesser  of  the  includible  compensation, 
ble 3-4.                                                        $70,475  (Table  3-4),  and  the  maximum  amount  of 
 After figuring the includible compensation, Max deter-         $69,000.
mines  the  limit  on  annual  additions  for  2024  to  be 

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General Limit
4.
Under the general limit on elective deferrals, the most that
can be contributed to your 403(b) account through a sal-
Limit on Elective ary reduction agreement is $22,500 for 2023 and $23,000
for 2024. This limit applies without regard to community
Deferrals property laws.
The second and final component of MAC is the limit on
elective deferrals. This is a limit on the amount of contribu-
tions that can be made to your account through a salary 15-Year Rule
reduction agreement.
If you have at least 15 years of service with an educational
A salary reduction agreement is an agreement between organization (such as a public or private school), hospital,
you and your employer that allows for a portion of your home health service agency, health and welfare service
compensation to be directly invested in a 403(b) account agency, church, or convention or association of churches
on your behalf. You can enter into more than one salary (or associated organization) and it is allowed by the terms
reduction agreement during a year. of the plan document, the limit on elective deferrals to your
More than one 403(b) account. If, for any year, 403(b) account is increased by the least of:
! elective deferrals are contributed to more than 1. $3,000;
CAUTION one 403(b) account for you (whether or not with
the same employer), you must combine all the elective de- 2. $15,000, reduced by the sum of:
ferrals to determine whether the total is more than the limit a. The additional pre-tax elective deferrals made in
for that year. prior years because of this rule, plus
403(b) plan and another retirement plan. If, during the b. The aggregate amount of designated Roth contri-
year, contributions in the form of elective deferrals are butions permitted for prior years because of this
made to other retirement plans on your behalf, you must rule; or
combine all of the elective deferrals to determine if they 3. $5,000 times the number of your years of service for
are more than your limit on elective deferrals. The limit on the organization, minus the total elective deferrals
elective deferrals applies to amounts contributed to: made by your employer on your behalf for earlier
• 401(k) plans, to the extent excluded from income; years.
• Roth contribution programs; If you qualify for the 15-year rule (sometimes referred to
as the “special section 403(b) catch-up” or the
• Section 501(c)(18) plans, to the extent excluded from
“years-of-service catch-up”), your elective deferrals under
income;
this limit can be as high as $25,500 for 2023 and $26,000
• Savings incentive match plan for employees (SIMPLE) for 2024.
plans;
To determine whether you have 15 years of service with
• Salary reduction simplified employee pension (SAR- your employer, see Years of Service, next.
SEP) plans; and
• All 403(b) plans. Years of Service

Roth contribution program. Your 403(b) plan may allow To determine if you are eligible for the increased limit on
you to designate all or a portion of your elective deferrals elective deferrals, you will first need to figure your years of
as Roth contributions. Elective deferrals designated as service. How you figure your years of service depends on
Roth contributions must be maintained in a separate Roth whether you were a full-time or a part-time employee,
account and aren’t excludable from your gross income. whether you worked for the full year or only part of the
The maximum amount of contributions allowed under a year, and whether you have worked for your employer for
Roth contribution program is your limit on elective defer- an entire year.
rals, less your elective deferrals not designated as Roth
contributions. For more information on the Roth contribu- You must figure years of service for each year during
tion program, see Pub. 560, Retirement Plans for Small which you worked for the employer who is maintaining
Business. your 403(b) account.
Excess elective deferrals. If the amount contributed If more than one employer maintains a 403(b) account
is more than the allowable limit, you must include the ex- for you in the same year, you must figure years of service
cess that isn’t a Roth contribution in your gross income for separately for each employer.
the year contributed. For purposes of the 15-year rule, years of service are
figured through the year for which the calculation is being

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made. For example, to determine the limit for 2022, you Table 4-1. Teacher's Years of Service
count years of service through 2023.
Note. This table shows how the teacher figures the years
Definition of service, as explained in the previous example.

Your years of service are the total number of years you Year Period Worked Portion of Work Years of Service
Period
have worked as a full-time employee for the employer
maintaining your 403(b) account as of the end of the year. 2019 Sept.–Dec. 0.5 year 0.5 year
Feb.–May 0.5 year
2020 1 year
Figuring Your Years of Service Sept.–Dec. 0.5 year
Feb.–May 0.5 year
Take the following rules into account when figuring your 2021 1 year
years of service. Sept.–Dec. 0.5 year
Feb.–May 0.5 year
Status of employer. Your years of service include only 2022 1 year
Sept.–Dec. 0.5 year
periods during which your employer was an eligible em-
Feb.–May 0.5 year
ployer. Your plan administrator can tell you whether or not 2023 1 year
your employer was qualified during all your periods of Sept.–Dec. 0.5 year
service. Total years of service 4.5 years

Service with one employer. Generally, you can’t count Full-time or part-time. To figure your years of service,
service for any employer other than the one who maintains you must analyze each year individually and determine
your 403(b) account. whether you worked full-time for the full year or something
Church employee. If you are a church employee, treat other than full-time. When determining whether you
all of your years of service with related church organiza- worked full-time or something other than full-time, use
tions as years of service with the same employer. For your employer's annual work period as the standard.
more information about church employees, see chapter 5. Employer's annual work period. Your employer's an-
nual work period is the usual amount of time an individual
Self-employed ministers. If you are a self-employed
working full-time in a specific position is required to work.
minister, your years of service include full and part years
Generally, this period of time is expressed in days, weeks,
in which you have been treated as employed by a tax-ex-
months, or semesters, and can span 2 calendar years.
empt organization that is an eligible employer.
Note. You can’t accumulate more than 1 year of serv-
Total years of service. When figuring prior years of
ice in a 12-month period.
service, figure each year individually and then add the in-
dividual years of service to determine your total years of Example. All full-time teachers at ABC Public Schools
service. are required to work both the September through Decem-
ber semester and the February through May semester.
Example. The annual work period for full-time teach-
Therefore, the annual work period for full-time teachers
ers employed by ABC Public Schools is September
employed by ABC Public Schools is September through
through December and February through May. A teacher
December and February through May. Teachers at ABC
began working with ABC Public Schools in September
Public Schools who work both semesters in the same cal-
2019. The teacher has always worked full-time for each
endar year are considered working a full year of service in
annual work period. At the end of 2023, the teacher had
that calendar year.
4.5 years of service with ABC Public Schools, as shown in
Table 4-1.
Full-Time Employee for the Full Year

Count each full year during which you were employed
full-time as 1 year of service. In determining whether you
were employed full-time, compare the amount of work you
were required to perform with the amount of work normally
required of others who held the same position with the
same employer and who generally received most of their
pay from the position.

How to compare. You can use any method that reasona-
bly and accurately reflects the amount of work required.
For example, if you are a teacher, you can use the number
of hours of classroom instruction as a measure of the
amount of work required.

12 Chapter 4 Limit on Elective Deferrals Publication 571 (1-2024)

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In determining whether positions with the same em- Number of months worked 4 1
ployer are the same, consider all of the facts and circum- Number of months in annual work = 8 = 2
stances concerning the positions, including the work per- period
formed, the methods by which pay is determined, and the
descriptions (or titles) of the positions. Part-time for the full year. If, during a year, you were
employed part-time for the employer's entire annual work
Example. An assistant professor employed in the Eng- period, you figure the fraction for that year as follows.
lish department of a university will be considered a
full-time employee if the amount of work that an assistant • The numerator (top number) is the number of hours or
professor is required to perform is the same as the amount days you worked.
of work normally required of assistant professors of Eng- • The denominator (bottom number) is the number of
lish at that university who get most of their pay from that hours or days normally required of someone holding
position. the same position who works full-time.
If no one else works for your employer in the same posi-
tion, compare your work with the work normally required of Example. Alex teaches one course at a local medical
others who held the same position with similar employers school 3 hours per week for two semesters. Other faculty
or similar positions with your employer. members at the same school teach 9 hours per week for
two semesters. The annual work period of the medical
Full year of service. A full year of service for a particular school is two semesters. An instructor teaching 9 hours a
position means the usual annual work period of anyone week for two semesters is considered a full-time em-
employed full-time in that general type of work at that ployee. Given these facts, Alex has worked part-time for a
place of employment. full annual work period. Alex has completed / of a year of 1 3
service, figured as shown below.
Example. If a doctor works for a hospital 12 months of
a year except for a 1-month vacation, the doctor will be Number of hours worked per week 3 1
considered as employed for a full year if the other doctors
= =
at that hospital also work 11 months of the year with a Number of hours per week considered 9 3
full-time
1-month vacation. Similarly, if the usual annual work pe-
riod at a university consists of the fall and spring semes-
Part-time for part of the year. If, during any year, you
ters, an instructor at that university who teaches these se-
were employed part-time for only part of your employer's
mesters will be considered as working a full year.
annual work period, you figure your fraction for that year
by multiplying two fractions.
Other Than Full-Time for the Figure the first fraction as though you had worked
Full Year full-time for part of the annual work period. The fraction is
as follows.
If, during any year, you were employed full-time for only
part of your employer's annual work period, part-time for • The numerator (top number) is the number of weeks,
the entire annual work period, or part-time for only part of months, or semesters you were a full-time employee.
the work period, your year of service for that year is a frac- • The denominator (bottom number) is the number of
tion of your employer's annual work period. weeks, months, or semesters considered the normal
annual work period for the position.
Full-time for part of the year. If, during a year, you were
employed full-time for only part of your employer's annual Figure the second fraction as though you had worked
work period, figure the fraction for that year as follows. part-time for the entire annual work period. The fraction is
as follows.
• The numerator (top number) is the number of weeks,
months, or semesters you were a full-time employee. • The numerator (top number) is the number of hours or
days you worked.
• The denominator (bottom number) is the number of
weeks, months, or semesters considered the normal • The denominator (bottom number) is the number of
annual work period for the position. hours or days normally required of someone holding
the same position who works full-time.
Example. An instructor was employed full-time by a lo- Once you have figured these two fractions, multiply
cal college for the 4 months of the 2023 spring semester them together to determine the fraction representing your
(February 2023 through May 2023). The annual work pe- partial year of service for the year.
riod for the college is 8 months (February through May
and July through October). Given these facts, the instruc- Example. An attorney teaches a course 3 hours per
tor was employed full-time for part of the annual work pe- week for 1 semester at a law school. The annual work pe-
riod and provided / of a year of service. The instructor’s 1 2 riod for teachers at the school is 2 semesters. All full-time
years of service computation for 2023 is as follows. instructors at the school are required to teach 12 hours
per week. Based on these facts, the attorney is employed
part-time for part of the annual work period. The attorney’s

Publication 571 (1-2024) Chapter 4 Limit on Elective Deferrals 13

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year of service for this year is determined by multiplying Example
two fractions. The computation is as follows.
Max has figured the limit on annual additions. The only
Attorney’s first fraction other component needed before Max can determine its
MAC for 2024 is the limit on elective deferrals.
Number of semesters worked 1
=
Number of semesters in annual work period 2 Figuring Max's limit on elective deferrals. Max has
been employed with the current employer for less than 15
Attorney's second fraction years. Max isn’t eligible for the special 15-year increase.
Therefore, the limit on elective deferrals for 2024 is
Number of hours worked per week 3 1 $23,000, as shown in Table 4-2.
Number of hours per week considered = 12 = 4
full-time Max's employer won’t make any nonelective contribu-
tions to the 403(b) account and Max won’t make any af-
The attorney would multiply these fractions to obtain ter-tax contributions. Additionally, Max's employer doesn’t
the fractional year of service. offer a Roth contribution program.

1 1 1 Figuring Max's MAC
x =
2 4 8
Max has determined that the limit on annual additions for
2024 is $69,000 and the limit on elective deferrals is
$23,000. Because elective deferrals are the only contribu-
Figuring the Limit on Elective tions made to Max's account, the maximum amount that
can be contributed to a 403(b) account on Max's behalf in
Deferrals 2024 is $23,000, the lesser of both limits.

You can use Part II of Worksheet 1 in chapter 9 to figure
the limit on elective deferrals.

14 Chapter 4 Limit on Elective Deferrals Publication 571 (1-2024)

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Table 4-2. Worksheet 1. Maximum Amount Contributable (MAC)
           Note. Use this worksheet to figure your MAC.

                                        Part I. Limit on Annual Additions
 1. Enter your includible compensation for your most recent year of service                           . . . . . . . . . . . . . . . . . .    1.  $70,475
 2. Maximum:
    •   For 2023, enter $66,000.
    •   For 2024, enter $69,000           . . . . . . . . . . . . . . . . . . . . . . . .   . . . . . . . . . . . . . . . . . . . . . . . .  2.  69,000
 3. Enter the lesser of line 1 or line 2. This is your limit on annual additions. . . . . . . . . . . . . . . . . . .                        3.  69,000
    Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3 
    on line 18. 
                                      Part II. Limit on Elective Deferrals
 4. Maximum contribution:
    •   For 2023, enter $22,500.
    •   For 2024, enter $23,000           . . . . . . . . . . . . . . . . . . . . . . . .   . . . . . . . . . . . . . . . . . . . . . . . .  4.  23,000
    Note. If you have at least 15 years of service with a qualifying organization, complete lines 5 
    through 17. If not, enter zero (-0-) on line 16 and go to line 17.
 5. Amount per year of service          . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5.   5,000
 6. Enter your years of service         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6.  
 7. Multiply line 5 by line 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       7.  
 8. Enter the total of all elective deferrals made for you by the qualifying organization for prior 
    years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.  
 9. Subtract line 8 from line 7. If zero or less, enter zero (-0-). . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  9.  -0-
10. Maximum increase in limit for long service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 10.  15,000
11. Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year 
    rule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.   
12. Enter the aggregate amount of all designated Roth contributions permitted for prior years under 
    the 15-year rule    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.   
13. Add lines 11 and 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        13.   
14. Subtract line 13 from line 10         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.   
15. Maximum additional contributions              . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.   3,000
16. Enter the least of line 9, 14, or 15. This is your increase in the limit for long service. . . . . . . . . . .                          16.  -0-
17. Add lines 4 and 16. This is your limit on elective deferrals. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   17.  23,000
                                        Part III. Maximum Amount Contributable
18. •   If you had only nonelective contributions, enter the amount from line 3. This is your MAC.
         
    •   If you had only elective deferrals, enter the lesser of line 3 or line 17. This is your MAC.
         
    •   If you had both elective deferrals and nonelective contributions, enter the amount from line 3. 
        This is your MAC. (Use the amount on line 17 to determine if you have excess elective 
        deferrals as explained in chapter 7.). . . . . . . . . . . . . . . . . . . .                . . . . . . . . . . . . . . . . . . . . 18.  23,000

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                                                                 Changes to Includible 
5.
                                                                 Compensation for Most Recent 

Ministers and Church                                             Year of Service

Employees                                                        There are two types of changes in determining includible 
                                                                 compensation  for  the  most  recent  year  of  service.  They 
Self-employed ministers and church employees who par-            are:
ticipate in 403(b) plans generally follow the same rules as      •   Changes in how the includible compensation of for-
other 403(b) plan participants.                                      eign missionaries and self-employed ministers is fig-
This means that if you are a self-employed minister or a             ured, and
church employee, your MAC is generally the lesser of:            •   A change to the years that are counted when figuring 
•  Your limit on annual additions, or                                the most recent year of service for church employees 
                                                                     and self-employed ministers.
•  Your limit on elective deferrals.

For most ministers and church employees, the limit on an-        Changes to Includible Compensation
nual additions is figured without any changes. This means 
that if you are a minister or church employee, your limit on     Includible  compensation  is  figured  differently  for  foreign 
annual additions is generally the lesser of:                     missionaries and self-employed ministers.

•  $66,000 for 2023 and $69,000 for 2024, or                     Foreign missionary. If you are a foreign missionary, your 
•  Your includible compensation for your most recent             includible  compensation  includes  foreign  earned  income 
   year of service.                                              that may otherwise be excludable from your gross income 
                                                                 under section 911.
Although,  in  general,  the  same  limit  applies,  church  em- If you are a foreign missionary, and your adjusted gross 
ployees  can  choose  an  alternative  limit  and  there  are    income is $17,000 or less, contributions to your 403(b) ac-
changes in how church employees, foreign missionaries,           count  won’t  be  treated  as  exceeding  the  limit  on  annual 
and  self-employed  ministers  figure  includible  compensa-     additions if the contributions aren’t in excess of $3,000.
tion for the most recent year of service. This chapter will      You are a foreign missionary if you are either a layper-
explain the alternative limit and the changes.                   son or a duly ordained, commissioned, or licensed minis-
Who is a church employee?       A church employee is any-        ter of a church and you meet both of the following require-
one who is an employee of a church or a convention or as-        ments.
sociation of churches, including an employee of a tax-ex-        •   You are an employee of a church or convention or as-
empt  organization  controlled  by  or  associated  with  a          sociation of churches.
church or a convention or association of churches.
                                                                 •   You are performing services for the church outside the 
                                                                     United States.

Alternative Limit for Church                                     Self-employed minister.   If you are a self-employed min-
                                                                 ister, you are treated as an employee of a tax-exempt or-
Employees                                                        ganization  that  is  an  eligible  employer.  Your  includible 
                                                                 compensation is your net earnings from your ministry mi-
If  you  are  a  church  employee,  you  can  choose  to  use    nus the contributions made to the retirement plan on your 
$10,000 a year as your limit on annual additions, even if        behalf and the deductible portion of your self-employment 
your  annual  additions  figured  under  the  general  rule  are tax.
less.
Total contributions over your lifetime under this choice         Changes to Years of Service
can’t be more than $40,000.
                                                                 Generally,  only  service  with  the  employer  who  maintains 
                                                                 your  403(b)  account  can  be  counted  when  figuring  your 
                                                                 limit on annual additions.

                                                                 Church employee.  If you are a church employee, treat all 
                                                                 of your years of service as an employee of a church or a 
                                                                 convention or association of churches as years of service 
                                                                 with one employer.

16                                    Chapter 5 Ministers and Church Employees             Publication 571 (1-2024)

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Self-employed minister. If you are a self-employed min- Catch-up contributions aren’t counted against
ister, your years of service include full and part years dur- TIP your MAC. Therefore, the maximum amount that
ing which you were self-employed. you are allowed to have contributed to your 403(b)
account is your MAC plus your allowable catch-up contri-
butions.

You can use Worksheet C in chapter 9 to figure your limit
on catch-up contributions.
6.

Catch-up Contributions

The most that can be contributed to your 403(b) account 7.
is the lesser of your limit on annual additions or your limit
on elective deferrals.
If you will be age 50 or older by the end of the year, you Excess Contributions
may also be able to make additional catch-up contribu-
If your actual contributions (not including catch-up contri-
tions. These additional contributions can’t be made with
butions) are greater than your MAC, you have an excess
after-tax employee contributions.
contribution. Excess contributions can result in income
You are eligible to make catch-up contributions if: tax, additional taxes, and penalties. The effect of excess
contributions depends on the type of excess contribution.
• You will have reached age 50 by the end of the year,
This chapter discusses excess contributions to your
• Your employer's plan document allows for catch-up 403(b) account.
contributions, and
• The maximum amount of elective deferrals that can be
made to your 403(b) account have been made for the How Do I Know if I Have
plan year.
Excess Contributions?
The maximum amount of catch-up contributions is the
lesser of: At the end of the year or the beginning of the next year,
• $7,500 for 2023 and 2024; or you should refigure your MAC based on your actual com-
pensation and actual contributions made to your account.
• The excess of your compensation for the year, over
the elective deferrals that aren’t catch-up contribu- If the actual contributions (not including catch-up contri-
tions. butions) to your account are greater than your MAC, you
have excess contributions. If, at any time during the year,
Figuring catch-up contributions. When figuring allowa- your employment status or your compensation changes,
ble catch-up contributions, combine all catch-up contribu- you should refigure your MAC using a revised estimate of
tions made by your employer on your behalf to the follow- compensation to prevent excess contributions.
ing plans.
• Qualified retirement plans. (To determine if your plan
is a qualified plan, ask your plan administrator.) What Happens if I Have Excess
• 403(b) plans.
Contributions?
• SARSEP plans.
• SIMPLE plans. Certain excess contributions in a 403(b) account can be
corrected. The effect of an excess 403(b) contribution will
The total amount of the catch-up contributions on your depend on the type of excess contribution.
behalf to all plans maintained by your employer can’t be
more than the annual limit. The limit is $7,500 for 2023 Types of excess contributions. If, after checking your
and 2024. actual contributions, you determine that you have an ex-
If you are eligible for both the 15-year rule in- cess, the first thing is to identify the type of excess that
you have. Excess contributions to a 403(b) account are
! crease in elective deferrals and the age 50 categorized as either an:
CAUTION catch-up, allocate amounts first under the 15-year
rule and next as an age 50 catch-up. • Excess annual addition, or
• Excess elective deferral.

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Excess Annual Addition April 15 of the following year. The plan can distribute the
excess deferral (and any income allocable to the excess)
An excess annual addition is a contribution (not including no later than April 15 of the year following the year the ex-
catch-up contributions) that is more than your limit on an- cess deferral was made.
nual additions. To determine your limit on annual addi-
tions, see chapter 3 chapter 5 ( for ministers or church em- Note. When April 15 falls on a Saturday, Sunday, or le-
ployees). gal holiday, a return is considered timely filed if filed on the
next succeeding day that isn’t a Saturday, Sunday, or legal
In the year that your contributions are more than your holiday.
limit on annual additions, the excess amount will be inclu-
ded in your income. Tax treatment of excess deferrals not attributable to
Roth contributions. If the excess deferral is distributed
Excise Tax by April 15, it is included in your income in the year con-
tributed and the earnings on the excess deferral will be
If your 403(b) account invests in mutual funds, and you ex- taxed in the year distributed.
ceed your limit on annual additions, you may be subject to
Note. When April 15 falls on a Saturday, Sunday, or le-
a 6% excise tax on the excess contribution. The excise tax
gal holiday, a return is considered timely filed if filed on the
doesn’t apply to funds in an annuity account or to excess
next succeeding day that isn’t a Saturday, Sunday, or legal
deferrals.
holiday.
You must pay the excise tax each year in which there
Tax treatment of excess deferrals attributable to Roth
are excess contributions in your account. Excess contribu-
contributions. For these rules, see Regulations section
tions can be corrected by contributing less than the appli-
1.402(g)-1(e).
cable limit in later years or by making permissible distribu-
tions. See chapter 8 for a discussion on permissible
distributions.

You can’t deduct the excise tax.

Reporting requirement. You must file Form 5330 if there 8.
has been an excess contribution to a custodial account
and that excess hasn’t been corrected.
Distributions and
Excess Elective Deferral
Rollovers
An excess elective deferral is the amount that is more than
your limit on elective deferrals. To determine your limit on
elective deferrals, see chapter 4.
Distributions
Your employer's 403(b) plan may contain language per-
mitting it to distribute excess deferrals. If so, it may require Permissible distributions. Generally, a distribution can’t
that in order to get a distribution of excess deferrals, you be made from a 403(b) account until the employee:
either notify the plan of the amount of excess deferrals or 1 2
designate a distribution as an excess deferral. The plan • Reaches age 59 / ;
may require that the notification or designation be in writ- • Has a severance from employment;
ing and may require that you certify or otherwise establish Dies;
•
that the designated amount is an excess deferral. A plan
isn’t required to permit distribution of excess deferrals. • Becomes disabled;
• In the case of elective deferrals, encounters financial
Correction of excess deferrals during year. If you
hardship;
have excess deferrals for a year, a corrective distribution
may be made only if both of the following conditions are • Has a qualified reservist distribution;
satisfied. • Has a qualified birth or adoption distribution;
• The plan and either you or your employer designate • Has certain distributions of lifetime income invest-
the distribution as an excess deferral to the extent you ments;
have excess deferrals for the year.
• Has an emergency personal expenses distribution;
• The correcting distribution is made after the date on
which the excess deferral was made. • Has a domestic abuse distribution; or
• Has a qualified disaster recovery distribution.
Correction of excess deferrals after the year. If you
have excess deferrals for a year, you may receive a cor-
recting distribution of the excess deferral no later than

18 Chapter 8 Distributions and Rollovers Publication 571 (1-2024)

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In most cases, the payments you receive or that are 25% (or 10% if timely corrected) excise tax on the differ-
made available to you under your 403(b) account are taxa- ence between the required minimum distribution and the
ble in full as ordinary income. In general, the same tax amount actually distributed.
rules apply to distributions from 403(b) plans that apply to
distributions from other retirement plans. These rules are
explained in Pub. 575. Pub. 575 also discusses the addi- No Special 10-Year Tax Option
tional tax on early distributions from retirement plans.
A distribution from a 403(b) plan doesn’t qualify as a
Note. You may choose to have qualified COVID-19 dis- lump-sum distribution. This means you can’t use the spe-
tributions (as defined earlier under Reminders) included in cial 10-year tax option to figure the taxable portion of a
income in equal amounts over 3 years. 403(b) distribution. For more information, see Pub. 575.

Retired public safety officers. If you are an eligible re-
tired public safety officer, you can exclude from your gross
Transfer of Interest in 403(b)
income distributions of up to $3,000 made from your
403(b) plan that are used to pay the premiums for cover- Contract
age by an accident or health plan, or a long-term care in-
surance contract. The premiums can be for you, your Contract exchanges. If you transfer all or part of your in-
spouse, or your dependents. The distribution can be terest from a 403(b) contract to another 403(b) contract
made directly from the plan to the provider of the accident (held in the same plan), the transfer is tax free, and is re-
or health plan or long-term care insurance contract, or the ferred to as a contract exchange. This was previously
distribution can be made to you to pay to the provider of known as a 90-24 transfer. A contract exchange is similar
the accident or health plan or long-term care insurance to a 90-24 transfer with one major difference. Previously,
contract. you were able to accomplish the transfer without your em-
A public safety officer is a law enforcement officer, ployer’s involvement. After September 24, 2007, all such
fire fighter, chaplain, or member of a rescue squad or am- transfers are accomplished through a contract exchange
bulance crew. requiring your employer’s involvement. In addition, the
For additional information, see Pub. 575. plan must provide for the exchange and the transferred in-
terest must be subject to the same or stricter distribution
Distribution for active reservist. The 10% additional
restrictions. Finally, your accumulated benefit after the ex-
tax for early withdrawals won’t apply to a qualified reserv-
change must be equal to what it was before the exchange.
ist distribution attributable to elective deferrals from a
Transfers that don’t satisfy this rule are plan distribu-
403(b) plan. A qualified reservist distribution is a distribu-
tions and are generally taxable as ordinary income.
tion that is made:
• To an individual who is a reservist or national guards- Plan-to-plan transfers. You may also transfer part or all
man and who was ordered or called to active duty for of your interest from a 403(b) plan to another 403(b) plan if
a period in excess of 179 days or for an indefinite pe- you are an employee of (or were formerly employed by)
riod, and the employer of the plan to which you would like to trans-
fer. Both the initial plan and the receiving plan must pro-
• During the period beginning on the date of the order or vide for transfers. Your accumulated benefit after the
call to duty and ending at the close of the active duty transfer must be at least equal to what it was before the
period. transfer. The new plan’s restrictions on distributions must
be the same or stricter than those of the original plan.
Minimum Required Distributions
Tax-free transfers for certain cash distributions. A
You must receive all, or at least a certain minimum, of your tax-free transfer may also apply to a cash distribution of
interest accruing after 1986 in the 403(b) plan by April 1 of your 403(b) account from an insurance company that is
the calendar year following the later of the calendar year in subject to a rehabilitation, conservatorship, insolvency, or
which you become age 73 (if you attain age 72 after De- similar state proceeding. To receive tax-free treatment,
cember 31, 2022), or the calendar year in which you retire. you must do all of the following.
Check with your employer, plan administrator, or • Withdraw all the cash to which you are entitled in full
TIP provider to find out whether this rule also applies settlement of your contract rights or, if less, the maxi-
to pre-1987 accruals. If not, a minimum amount of mum permitted by the state.
these accruals must begin to be distributed by the later of Reinvest the cash distribution in a single policy or con-
•
the end of the calendar year in which you reach age 75 or tract issued by another insurance company or in a sin-
April 1 of the calendar year following retirement. For each gle custodial account subject to the same or stricter
year thereafter, the minimum distribution must be made by distribution restrictions as the original contract not
the last day of the year. If you don’t receive the required later than 60 days after you receive the cash distribu-
minimum distribution, you are subject to a nondeductible tion.
• Assign all future distribution rights to the new contract
or account for investment in that contract or account if

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you received an amount that is less than what you are
entitled to because of state restrictions.
Tax-Free Rollovers
In addition to the preceding requirements, you must
provide the new insurer with a written statement contain- You can generally roll over tax free all or any part of a dis-
ing all of the following information. tribution from a 403(b) plan to a traditional IRA or a
• The gross amount of cash distributed under the old non-Roth eligible retirement plan, except for any nonquali-
contract. fying distributions, described later. You may also roll over
any part of a distribution from a 403(b) plan by converting
• The amount of cash reinvested in the new contract. it through a direct rollover, described below, to a Roth IRA.
• Your investment in the old contract on the date you re- Conversion amounts are generally includible in your taxa-
ceive your first cash distribution. ble income in the year of the distribution from your 403(b)
Also, you must attach the following items to your timely account. See Pub. 590-A for more information about con-
filed income tax return in the year you receive the first dis- version into a Roth IRA.

tribution of cash. Note. A participant is required to roll over distribution
1. A copy of the statement you gave the new insurer. amounts received within 60 calendar days in order for the
amount to be treated as nontaxable. Distribution amounts
2. A statement that includes: that are rolled over within the 60 days aren’t subject to the
a. The words ELECTION UNDER REV. PROC. 10% additional tax on early distributions.
92-44,
Note. The repayment of a qualified birth or adoption
b. The name of the company that issued the new distribution, emergency personal expense distribution, or
contract, and a distribution to a domestic abuse victim from an applica-
ble eligible retirement plan is treated as a direct transfer of
c. The new policy number.
the distribution to the plan within 60 days of the distribu-
Direct trustee-to-trustee transfer. If you make a direct tion.
trustee-to-trustee transfer from your governmental 403(b)
Rollovers to and from 403(b) plans. You can generally
account to a defined benefit governmental plan, it may not
roll over tax free all or any part of a distribution from an eli-
be includible in gross income.
gible retirement plan to a 403(b) plan. Beginning January
The transfer amount isn’t includible in gross income if it
1, 2008, distributions from tax-qualified retirement plans
is made to:
and tax-sheltered annuities can be converted by making a
• Purchase permissive service credits; or direct rollover into a Roth IRA subject to the restrictions
• Repay contributions and earnings that were previously that currently apply to rollovers from a traditional IRA into a
refunded under a forfeiture of service credit under the Roth IRA. Converted amounts are generally includible in
plan, or under another plan maintained by a state or your taxable income in the year of the distribution from
local government employer within the same state. your 403(b) account. See Pub. 590-A for more information
on conversion into a Roth IRA.
After-tax contributions. For distributions beginning If a distribution includes both pre-tax contributions and
after December 31, 2006, after-tax contributions can be after-tax contributions, the portion of the distribution that is
rolled over between a 403(b) plan and a defined benefit rolled over is treated as consisting first of pre-tax amounts
plan, an IRA, or a defined contribution plan. If the rollover (contributions and earnings that would be includible in in-
is to or from a 403(b) plan, it must occur through a direct come if no rollover occurred). This means that if you roll
trustee-to-trustee transfer. over an amount that is at least as much as the pre-tax por-
Permissive service credit. A permissive service tion of the distribution, you don’t have to include any of the
credit is credit for a period of service recognized by a de- distribution in income.
fined benefit governmental plan only if you voluntarily con- For more information on rollovers and eligible retire-
tribute to the plan an amount that doesn’t exceed the ment plans, see Pub. 575.
amount necessary to fund the benefit attributable to the If you roll over money or other property from a
period of service and the amount contributed is in addition ! 403(b) plan to an eligible retirement plan, see
to the regular employee contribution, if any, under the CAUTION Pub. 575 for information about possible effects on
plan. later distributions from the eligible retirement plan.
A permissive service credit may also include service
credit for up to 5 years where there is no performance of Hardship exception to rollover rules. The IRS may
service, or service credited to provide an increased bene- waive the 60-day rollover period if the failure to waive such
fit for service credit which a participant is receiving under requirement would be against equity or good conscience,
the plan. including cases of casualty, disaster, or other events be-
Check with your plan administrator as to the type and yond the reasonable control of an individual.
extent of service that may be purchased by this transfer.

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Ways to get a waiver of the 60-day rollover require- the IRS will consider all of the relevant facts and circum-
ment. There are three ways to obtain a waiver of the stances, including:
60-day rollover requirement. Whether errors were made by the financial institution,
•
• You qualify for an automatic waiver. that is, the plan administrator, or IRA trustee, issuer, or
custodian;
• You self-certify that you met the requirements of a
waiver. • Whether you were unable to complete the rollover
within the 60-day period due to death, disability, hospi-
• You request and receive a private letter ruling granting
talization, incarceration, serious illness, restrictions im-
a waiver.
posed by a foreign country, or postal error;
How do you qualify for an automatic waiver? You Whether you used the amount distributed; and
•
qualify for an automatic waiver if all of the following apply.
• How much time has passed since the date of the dis-
• The financial institution receives the funds on your be- tribution.
half before the end of the 60-day rollover period.
• You followed all of the procedures set by the financial Note. The IRS can waive only the 60-day rollover re-
institution for depositing the funds into an IRA or other quirement and not the other requirements for a valid roll-
eligible retirement plan within the 60-day rollover pe- over contribution.
riod (including giving instructions to deposit the funds For more information on waivers of the 60-day rollover
into a plan or IRA). requirement, go to IRS.gov/Retirement-Plans/Retirement-
Plans-FAQS-Relating-to-Waivers-of-the-60-Day-Rollover-
• The funds are not deposited into a plan or IRA within Requirement.
the 60-day rollover period solely because of an error
on the part of the financial institution. Eligible retirement plans. The following are consid-
ered eligible retirement plans.
• The funds are deposited into a plan or IRA within 1
year from the beginning of the 60-day rollover period. • IRAs.
• It would have been a valid rollover if the financial insti- • Roth IRAs.
tution had deposited the funds as instructed. • 403(a) annuity plans.
If you do not qualify for an automatic waiver, you can use • 403(b) plans.
the self-certification procedure to make a late rollover con-
tribution or you can apply to the IRS for a waiver of the • Government eligible 457 plans.
60-day rollover requirement. • Qualified retirement plans.
How do you self-certify that you qualify for a If the distribution is from a designated Roth account, then
waiver? Based on Revenue Procedure 2016-47, 2016-37 the only eligible retirement plan is another designated
I.R.B. 346, available at IRS.gov/irb/2016-37_IRB/ Roth account or a Roth IRA.
ar09.html, you may make a written certification to a plan
administrator or an IRA trustee that you missed the 60-day
Nonqualifying distributions. You can’t roll over tax
rollover contribution deadline because of one or more of
free:
the 11 reasons listed in Revenue Procedure 2016-47. A
plan administrator or an IRA trustee may rely on the certifi- • Minimum required distributions (generally required to
cation in accepting and reporting receipt of the rollover begin at age 73 if you attain age 72 after December
contribution. You may make the certification by using the 31, 2022);
model letter in the appendix to the revenue procedure or • Substantially equal payments over your life or life ex-
by using a letter that is substantially similar. There is no pectancy;
IRS fee for self certification. A copy of the certification
should be kept in your files and be available if requested • Substantially equal payments over the joint lives or life
on audit. expectancies of your beneficiary and you;
For additional information on rollovers, see Pub. 590-A. • Substantially equal payments for a period of 10 years
How do you apply for a waiver ruling and what is or more;
the fee? You can request a ruling according to the proce- • Hardship distributions; or
dures outlined in Revenue Procedure 2003-16, as modi- Corrective distributions of excess contributions or ex-
•
fied by Revenue Procedure 2016-47 and Revenue Proce- cess deferrals, and any income allocable to the ex-
dure 2020-46; and Revenue Procedure 2024-4. See cess, or excess annual additions and any allocable
Appendix A for the applicable user fee. gains.
How does the IRS determine whether to grant a
waiver in a private letter ruling? In determining Rollover of nontaxable amounts. You may be able to
whether to issue a favorable letter ruling granting a waiver, roll over the nontaxable part of a distribution (such as your
after-tax contributions) made to another eligible retirement
plan, traditional IRA, or Roth IRA. The transfer must be
made either through a direct rollover to an eligible plan

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that separately accounts for the taxable and nontaxable all of the rollover rules apply to you as if you were the em-
parts of the rollover or through a rollover to a traditional ployee. You can roll over your interest in the plan to a tradi-
IRA or Roth IRA. tional IRA or another 403(b) plan. For more information on
If you roll over only part of a distribution that includes the treatment of an interest received under a QDRO, see
both taxable and nontaxable amounts, the amount you roll Pub. 575.
over is treated as coming first from the taxable part of the
distribution. Spouses of deceased employees. If you are the
spouse of a deceased employee, you can roll over the
Direct rollovers of 403(b) plan distributions. You have qualifying distribution attributable to the employee. You
the option of having your 403(b) plan make the rollover di- can make the rollover to any eligible retirement plan.
rectly to a traditional IRA, Roth IRA, or new plan. Before After you roll money and other property over from a
you receive a distribution, your plan will give you informa- 403(b) plan to an eligible retirement plan, and you take a
tion on this. It is generally to your advantage to choose this distribution from that plan, you won’t be eligible to receive
option because your plan won’t withhold tax on the distri- the capital gain treatment or the special averaging treat-
bution if you choose it. ment for the distribution.
Distribution received by you. If you receive a distribu- Second rollover. If you roll over a qualifying distribu-
tion that qualifies to be rolled over, you can roll over all or tion to a traditional IRA, you can, if certain conditions are
any part of the distribution. Generally, you will receive only satisfied, later roll the distribution into another 403(b) plan.
80% of the distribution because 20% must be withheld. If For more information, see IRA as a holding account (con-
you roll over only the 80% you receive, you must pay tax duit IRA) for rollovers to other eligible plans in chapter 1 of
on the 20% you didn’t roll over. You can replace the 20% Pub. 590-A.
that was withheld with other money within the 60-day pe-
Nonspouse beneficiary. A nonspouse beneficiary may
riod to make a 100% rollover.
make a direct rollover of a distribution from a 403(b) plan
Voluntary deductible contributions. For tax years of a deceased participant if the rollover is a direct transfer
1982 through 1986, employees could make deductible to an inherited IRA established to receive the distribution.
contributions to a 403(b) plan under the IRA rules instead If the rollover is a direct trustee-to-trustee transfer to an
of deducting contributions to a traditional IRA. IRA established to receive the distribution:
If you made voluntary deductible contributions to a • The transfer will be treated as an eligible rollover distri-
403(b) plan under these traditional IRA rules, the distribu- bution,
tion of all or part of the accumulated deductible contribu-
tions may be rolled over if it otherwise qualifies as a distri- • The IRA will be considered an inherited account, and
bution you can roll over. Accumulated deductible • The required minimum distribution rules that apply in
contributions are the deductible contributions: instances where the participant dies before the entire
• Plus interest is distributed will apply to the transferred IRA.
For more information on IRAs, see Pubs. 590-A and
1. Income allocable to the contributions,
590-B.
2. Gain allocable to the contributions, and
Frozen deposits. The 60-day period usually allowed for
• Minus completing a rollover is extended for any time that the
1. Expenses and losses allocable to the contribu- amount distributed is a frozen deposit in a financial institu-
tions; and tion. The 60-day period can’t end earlier than 10 days af-
ter the deposit ceases to be a frozen deposit.
2. Distributions from the contributions, income, or A frozen deposit is any deposit that on any day during
gain. the 60-day period can’t be withdrawn because:
Excess employer contributions. The portion of a distri- 1. The financial institution is bankrupt or insolvent, or
bution from a 403(b) plan transferred to a traditional IRA
2. The state where the institution is located has placed
that was previously included in income as excess em-
limits on withdrawals because one or more banks in
ployer contributions isn’t an eligible rollover distribution.
the state are (or are about to be) bankrupt or insol-
Its transfer doesn’t affect the rollover treatment of the
vent.
eligible portion of the transferred amounts. However, the
ineligible portion is subject to the traditional IRA contribu-
tion limits and may create an excess IRA contribution sub-
ject to a 6% excise tax. See chapter 1 of Pub. 590-A. Gift Tax

Qualified domestic relations order (QDRO). You may If, by choosing or not choosing an election, or option, you
be able to roll over tax free all or any part of an eligible roll- provide an annuity for your beneficiary at or after your
over distribution from a 403(b) plan that you receive under death, you may have made a taxable gift equal to the
a QDRO. If you receive the interest in the 403(b) plan as value of the annuity.
an employee's spouse or former spouse under a QDRO,

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Joint and survivor annuity.     If the gift is an interest in a 
joint and survivor annuity where only you and your spouse 
have the right to receive payments, the gift will generally       When Should I Figure MAC?
be  treated  as  qualifying  for  the  unlimited  marital  deduc-
tion.                                                             At the beginning of each year, you should figure your MAC 
                                                                  using  a  conservative  estimate  of  your  compensation. 
More  information. For  information  on  the  gift  tax,  see     Should  your  income  change  during  the  year,  you  should 
Pub. 559, Survivors, Executors, and Administrators.               refigure your MAC based on a revised conservative esti-
                                                                  mate. By doing this, you will be able to determine if contri-
                                                                  butions to your 403(b) account should be increased or de-
                                                                  creased for the year.

                                                                  Checking the Previous Year's 
9.                                                                Contributions

                                                                  At the beginning of the following year, you should refigure 
Worksheets                                                        your MAC based on your actual earned income.
Chapter 2 introduced you to the term “maximum amount               At the end of the current year or the beginning of the 
contributable” (MAC). Generally, your MAC is the lesser of        next year, you should check your contributions to be sure 
your:                                                             you didn’t exceed your MAC. This means refiguring your 
                                                                  limit  based  on  your  actual  compensation  figures  for  the 
•  Limit on annual additions (chapter 3), or                      year. This will allow you to determine if the amount contrib-
•  Limit on elective deferrals (chapter 4).                       uted  is  more  than  the  allowable  amounts,  and  possibly 
                                                                  avoid additional taxes.
The  worksheets  in  this  chapter  can  help  you  figure  the 
cost of incidental life insurance, your includible compensa-
tion, your limit on annual additions, your limit on elective      Available Worksheets
deferrals,  your  limit  on  catch-up  contributions,  and  your 
                                                                  The following worksheets have been provided to help you 
MAC.
                                                                  figure your MAC.
      After  completing  the  worksheets,  you  should 
      maintain  them  with  your  403(b)  records  for  that      • Worksheet A. Cost of Incidental Life Insurance.
      year. Do not attach them to your tax return. At the         • Worksheet B. Includible Compensation for Your Most 
end  of  the  year  or  the  beginning  of  the  next  year,  you   Recent Year of Service.
should  compare  your  estimated  compensation  figures             Worksheet C. Limit on Catch-up Contributions.
                                                                  •
with your actual figures.
                                                                  • Worksheet 1. Maximum Amount Contributable (MAC).
If  your  compensation  is  the  same  as,  or  more  than,  the 
projected amounts and the calculations are correct, then 
you  should  simply  file  these  worksheets  with  your  other 
tax records for the year.
If  your  compensation  was  lower  than  your  estimated  fig-
ures, you will need to check the amount contributed during 
the year to determine if contributions are more than your 
MAC.
Worksheet A. Cost of Incidental Life Insurance
         Note. Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. 
         This amount will be used to figure includible compensation for your most recent year of service.
1.    Enter the value of the contract (amount payable upon your death) . . . . . . . . . . . . . . . . . . . . . . . . .                                           1.  
2.    Enter the cash value in the contract at the end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  2.  
3.    Subtract line 2 from line 1. This is the value of your current life insurance protection . . . . . . . . . . .                                               3.  
4.    Enter your age on your birthday nearest the beginning of the policy year . . . . . . . . . . . . . . . . . . . .                                             4.  
5.    Enter the 1-year term premium for $1,000 of life insurance based on your age. (From Figure 
      3-1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.  
6.    Divide line 3 by $1,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            6.  
7.    Multiply line 6 by line 5. This is the cost of your incidental life insurance . . . . . . . . . . . . . . . . . . . . .                                      7.  

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                                                                                                                                                               1
Worksheet B. Includible Compensation for Your Most Recent Year of Service
             Note. Use this worksheet to figure includible compensation for your most recent year of service.
    1. Enter your includible wages from the employer maintaining your 403(b) account for your most 
       recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           1.  
    2. Enter elective deferrals excluded from your gross income for your most recent year of 
       service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2   2.  
    3. Enter amounts contributed or deferred by your employer under a cafeteria plan for your most 
       recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           3.  
    4. Enter amounts contributed or deferred by your employer according to your election to your 457 
       account (a nonqualified plan of a state or local government or of a tax-exempt organization) for 
       your most recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   4.  
    5. Enter pre-tax contributions (employer's contributions made on your behalf according to your 
       election) to a qualified transportation fringe benefit plan for your most recent year of 
       service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5.  
    6. Enter your foreign earned income exclusion for your most recent year of service . . . . . . . . . . .                                                    6.  
    7. Add lines 1, 2, 3, 4, 5, and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               7.  
    8. Enter the cost of incidental life insurance that is part of your annuity contract for your most 
       recent year of service  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            8.  
    9. Enter compensation that was both:
       • Earned during your most recent year of service, and
       • Earned while your employer wasn’t qualified to maintain a 403(b) plan . . . . . . . . . . . . . . . .                                                  9.  
   10. Add lines 8 and 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         10.  
   11. Subtract line 10 from line 7. This is your includible compensation for your most recent year of 
       service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.  
1 Use estimated amounts if figuring includible compensation before the end of the year.
2 Elective deferrals made to a designated Roth account aren’t excluded from your gross income and shouldn’t be included on this line.

Worksheet C. Limit on Catch-up Contributions
             Note. If you will be age 50 or older by the end of the year, use this worksheet to figure your limit on 
             catch-up contributions.
   1. Maximum catch-up contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   1.    $7,500
   2. Enter your includible compensation for your most recent year of service  . . . . . . . . . . . . . . . . . . . .                                         2.    
   3. Enter your elective deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            3.    
   4. Subtract line 3 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          4.    
   5. Enter the lesser of line 1 or line 4. This is your limit on catch-up contributions . . . . . . . . . . . . . . . .                                       5.    

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Worksheet 1. Maximum Amount Contributable (MAC)
               Note. Use this worksheet to figure your MAC.

                                       Part I. Limit on Annual Additions
  1. Enter your includible compensation for your most recent year of service. . . . . . . . . . . . . . . . . .                               1.   
  2. Maximum:1
     •   For 2023, enter $66,000.
     •   For 2024, enter $69,000. . . . . . . . . . . . . . . . . . . . . . . .            . . . . . . . . . . . . . . . . . . . . . . . .    2.   
  3. Enter the lesser of line 1 or line 2. This is your limit on annual additions                      . . . . . . . . . . . . . . . . . .    3.   
     Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3 
     on line 18. 
                                       Part II. Limit on Elective Deferrals
  4. Maximum contribution:
     •   For 2023, enter $22,500.
     •   For 2024, enter $23,000. . . . . . . . . . . . . . . . . . . . . . . .            . . . . . . . . . . . . . . . . . . . . . . . .    4.   
     Note. If you have at least 15 years of service with a qualifying organization, complete lines 5 
     through 17. If not, enter zero (-0-) on line 16 and go to line 17.
  5. Amount per year of service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              5.  $ 5,000
  6. Enter your years of service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             6.  
  7. Multiply line 5 by line 6     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7.  
  8. Enter the total of all elective deferrals made for you by the qualifying organization for prior 
     years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8.  
  9. Subtract line 8 from line 7. If zero or less, enter zero (-0-)                . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9.   
 10. Maximum increase in limit for long service                . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10.  $15,000
 11. Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year 
     rule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.   
 12. Enter the aggregate amount of all designated Roth contributions permitted for prior years under 
     the 15-year rule    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12.   
 13. Add line 11 and line 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          13.   
 14. Subtract line 13 from line 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            14.   
 15. Maximum additional contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 15.  $ 3,000
 16. Enter the least of line 9, 14, or 15. This is your increase in the limit for long service                         . . . . . . . . . .   16.   
 17. Add lines 4 and 16. This is your limit on elective deferrals                  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   17.   
                                       Part III. Maximum Amount Contributable
 18. •   If you had only nonelective contributions, enter the amount from line 3. This is your MAC.
          
     •   If you had only elective deferrals, enter the lesser of line 3 or line 17. This is your MAC.
          
     •   If you had both elective deferrals and nonelective contributions, enter the amount from 
         line 3. This is your MAC. (Use the amount on line 17 to determine if you have excess 
         elective deferrals as explained in chapter 7.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   18.   
1 If you participate in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a 
qualified plan and simplified employee pension plans of all corporations, partnerships, and sole proprietorships in which you have more than 50% 
control. You must also combine the contributions made to all 403(b) accounts on your behalf by your employer.

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• Foreign housing costs,
• Income for bona fide residents of American Samoa,
10. Guam, or the Northern Mariana Islands, and
• Income from Puerto Rico.

Retirement Savings Eligible contributions. These include:
Contributions Credit 1. Contributions to a traditional or Roth IRA;
2. Elective deferrals, including amounts designated as
(Saver's Credit) after-tax Roth contributions, to:
If you or your employer makes eligible contributions (de- a. A 401(k) plan (including a SIMPLE 401(k) plan),
fined later) to a retirement plan, you may be able to take a b. A section 403(b) annuity,
credit of up to $2,000 (up to $4,000 if filing jointly). This
credit could reduce the federal income tax you pay dollar c. An eligible deferred compensation plan of a state
for dollar. or local government (a governmental 457 plan),
d. A SIMPLE IRA plan, or
Can you claim the credit? If you or your employer
makes eligible contributions to a retirement plan, you can e. A salary reduction SEP;
claim the credit if all of the following apply. 3. Contributions to a section 501(c)(18) plan; and
1. You aren’t under age 18. 4. ABLE account contributions by the designated benefi-
2. You aren’t a full-time student (explained next). ciary as defined by section 529A.
3. No one else, such as your parent(s), claims an ex- They also include voluntary after-tax employee contribu-
emption for you on their tax return. tions to a tax-qualified retirement plan or a section 403(b)
annuity. For purposes of the credit, an employee contribu-
4. Your adjusted gross income (defined later) isn’t more tion will be voluntary as long as it isn’t required as a condi-
than: tion of employment.
a. $73,000 for 2023 ($76,500 for 2024) if your filing
status is married filing jointly; Reducing eligible contributions. Reduce your eligible
contributions (but not below zero) by the total distributions
b. $54,750 for 2023 ($57,375 for 2024) if your filing you received during the testing period (defined later) from
status is head of household (with qualifying per- any IRA, plan, or annuity included earlier under Eligible
son); or contributions. Also, reduce your eligible contributions by
c. $36,500 for 2023 ($38,250 for 2024) if your filing any distribution from a Roth IRA that isn’t rolled over, even
status is single, married filing separately, or quali- if the distribution isn’t taxable.
fying surviving spouse with dependent child. Do not reduce your eligible contributions by any of the
following.
Full-time student. You are a full-time student if, during
some part of each of 5 calendar months (not necessarily 1. The portion of any distribution which isn’t includible in
consecutive) during the calendar year, you are either: income because it is a trustee-to-trustee transfer or a
rollover distribution.
• A full-time student at a school that has a regular teach-
ing staff, course of study, and regularly enrolled body 2. Distributions that are taxable as the result of an
of students in attendance; or in-plan rollover to your designated Roth account.
• A student taking a full-time, on-farm training course 3. Any distribution that is a return of a contribution to an
given by either a school that has a regular teaching IRA (including a Roth IRA) made during the year for
staff, course of study, and regularly enrolled body of which you claim the credit if:
students in attendance; or a state, county, or local a. The distribution is made before the due date (in-
government. cluding extensions) of your tax return for that year,
You are a full-time student if you are enrolled for the num- b. You don’t take a deduction for the contribution,
ber of hours or courses the school considers to be and
full-time.
c. The distribution includes any income attributable
Adjusted gross income. This is generally the amount to the contribution.
on line 11 of your 2023 Form 1040 or 1040-SR. For purpo-
ses of this section, adjusted gross income shall be deter- 4. Loans from a qualified employer plan treated as a dis-
mined without regard to sections 911, 931, and 933. You tribution.
must add to that amount any exclusion or deduction from 5. Distributions of excess contributions or deferrals (and
gross income claimed for the year for: income attributable to excess contributions and
• Foreign earned income, deferrals).

26 Chapter 10 Retirement Savings Contributions Credit Publication 571 (1-2024)
(Saver's Credit)

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6. Distributions of dividends paid on stock held by an             The maximum contribution taken into account is $2,000 
  employee stock ownership plan under section 404(k).              per person. On a joint return, up to $2,000 is taken into ac-
                                                                   count for each spouse.
7. Distributions from an eligible retirement plan that are 
                                                                   Figure  the  credit  on  Form  8880.  Report  the  credit  on 
  converted or rolled over to a Roth IRA.
                                                                   line  4  of  your  2023  Schedule  3  (Form  1040)  and  attach 
8. Distributions from a military retirement plan.                  Form 8880 to your return.
9. Distributions from an inherited IRA by a nonspousal 
  beneficiary.
                                                                   11. How To Get Tax Help
Distributions received by spouse.    Any distributions 
your spouse receives are treated as received by you if you         If you have questions about a tax issue; need help prepar-
file a joint return with your spouse both for the year of the      ing your tax return; or want to download free publications, 
distribution and for the year for which you claim the credit.      forms, or instructions, go to IRS.gov to find resources that 
Testing period.  The testing period consists of:                   can help you right away.

• The year in which you claim the credit,                          Preparing and filing your tax return. After receiving all 
• The 2 years before the year in which you claim the               your wage and earnings statements (Forms W-2, W-2G, 
  credit, and                                                      1099-R,  1099-MISC,  1099-NEC,  etc.);  unemployment 
                                                                   compensation statements (by mail or in a digital format) or 
• The period after the end of the year in which you claim          other  government  payment  statements  (Form  1099-G); 
  the credit and before the due date of the return (in-            and  interest,  dividend,  and  retirement  statements  from 
  cluding extensions) for filing your return for the year in       banks and investment firms (Forms 1099), you have sev-
  which you claimed the credit.                                    eral options to choose from to prepare and file your tax re-
                                                                   turn.  You  can  prepare  the  tax  return  yourself,  see  if  you 
Example. You  and  your  spouse  filed  joint  returns  in 
                                                                   qualify for free tax preparation, or hire a tax professional to 
2021 and 2022, and plan to do so in 2023 and 2024. You 
                                                                   prepare your return.
received  a  taxable  distribution  from  a  qualified  plan  in 
2021  and  a  taxable  distribution  from  an  eligible  section   Free options for tax preparation.    Your options for pre-
457(b) deferred compensation plan in 2022. Your spouse             paring  and  filing  your  return  online  or  in  your  local  com-
received taxable distributions from a Roth IRA in 2023 and         munity, if you qualify, include the following.
tax-free distributions from a Roth IRA in 2024 before April 
15. You made eligible contributions to an IRA in 2023 and          • Free File. This program lets you prepare and file your 
you otherwise qualify for this credit. You must reduce the           federal individual income tax return for free using soft-
amount of your qualifying contributions in 2023 by the total         ware or Free File Fillable Forms. However, state tax 
of the distributions you and your spouse received in 2021,           preparation may not be available through Free File. Go 
2022, 2023, and 2024.                                                to IRS.gov/FreeFile to see if you qualify for free online 
                                                                     federal tax preparation, e-filing, and direct deposit or 
Maximum  eligible  contributions. After  your  contribu-             payment options.
tions  are  reduced,  the  maximum  annual  contribution  on       • VITA. The Volunteer Income Tax Assistance (VITA) 
which you can base the credit is $2,000 per person.                  program offers free tax help to people with 
                                                                     low-to-moderate incomes, persons with disabilities, 
Effect on other credits. The amount of this credit won’t 
                                                                     and limited-English-speaking taxpayers who need 
change  the  amount  of  your  refundable  tax  credits.  A  re-
                                                                     help preparing their own tax returns. Go to IRS.gov/
fundable tax credit, such as the earned income credit or 
                                                                     VITA, download the free IRS2Go app, or call 
the additional child tax credit, is an amount that you would 
                                                                     800-906-9887 for information on free tax return prepa-
receive as a refund even if you didn’t otherwise owe any 
                                                                     ration.
taxes.
                                                                   • TCE. The Tax Counseling for the Elderly (TCE) pro-
Maximum  credit. This  is  a  nonrefundable  credit.  The            gram offers free tax help for all taxpayers, particularly 
amount  of  the  credit  in  any  year  can’t  be  more  than  the   those who are 60 years of age and older. TCE volun-
amount of tax that you would otherwise pay (not counting             teers specialize in answering questions about pen-
any refundable credits or the adoption credit) in any year.          sions and retirement-related issues unique to seniors. 
If your tax liability is reduced to zero because of other non-       Go to IRS.gov/TCE or download the free IRS2Go app 
refundable credits, such as the education credits, then you          for information on free tax return preparation.
won’t be entitled to this credit.
                                                                   • MilTax. Members of the U.S. Armed Forces and quali-
How to figure and report the credit. The amount of the               fied veterans may use MilTax, a free tax service of-
credit you can get is based on the contributions you make            fered by the Department of Defense through Military 
and your credit rate. The credit rate can be as low as 10%           OneSource. For more information, go to 
or as high as 50%. Your credit rate depends on your in-              MilitaryOneSource MilitaryOneSource.mil/MilTax (    ).
come and your filing status. See Form 8880 to determine 
your credit rate.

Publication 571 (1-2024)                                                                                                   27

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Also, the IRS offers Free Fillable Forms, which can matters. For more information on how to choose a tax pre-
be completed online and then e-filed regardless of in- parer, go to Tips for Choosing a Tax Preparer on IRS.gov.
come.
Employers can register to use Business Services On-
Using online tools to help prepare your return. Go to
line. The Social Security Administration (SSA) offers on-
IRS.gov/Tools for the following.
line service at SSA.gov/employer for fast, free, and secure
• The Earned Income Tax Credit Assistant IRS.gov/ ( online W-2 filing options to CPAs, accountants, enrolled
EITCAssistant) determines if you’re eligible for the agents, and individuals who process Form W-2, Wage
earned income credit (EIC). and Tax Statement, and Form W-2c, Corrected Wage and
Tax Statement.
• The Online EIN Application IRS.gov/EIN ( ) helps you
get an employer identification number (EIN) at no IRS social media. Go to IRS.gov/SocialMedia to see the
cost. various social media tools the IRS uses to share the latest
• The Tax Withholding Estimator IRS.gov/W4app ( ) information on tax changes, scam alerts, initiatives, prod-
makes it easier for you to estimate the federal income ucts, and services. At the IRS, privacy and security are our
tax you want your employer to withhold from your pay- highest priority. We use these tools to share public infor-
check. This is tax withholding. See how your withhold- mation with you. Don’t post your social security number
ing affects your refund, take-home pay, or tax due. (SSN) or other confidential information on social media
sites. Always protect your identity when using any social
• The First-Time Homebuyer Credit Account Look-up
networking site.
(IRS.gov/HomeBuyer) tool provides information on
The following IRS YouTube channels provide short, in-
your repayments and account balance.
formative videos on various tax-related topics in English,
• The Sales Tax Deduction Calculator IRS.gov/ ( Spanish, and ASL.
SalesTax) figures the amount you can claim if you
• Youtube.com/irsvideos.
itemize deductions on Schedule A (Form 1040).
• Youtube.com/irsvideosmultilingua.
Getting answers to your tax questions. On
IRS.gov, you can get up-to-date information on • Youtube.com/irsvideosASL.
current events and changes in tax law.
Watching IRS videos. The IRS Video portal
• IRS.gov/Help: A variety of tools to help you get an- (IRSVideos.gov) contains video and audio presentations
swers to some of the most common tax questions. for individuals, small businesses, and tax professionals.
• IRS.gov/ITA: The Interactive Tax Assistant, a tool that
will ask you questions and, based on your input, pro- Online tax information in other languages. You can
vide answers on a number of tax law topics. find information on IRS.gov/MyLanguage if English isn’t
your native language.
• IRS.gov/Forms: Find forms, instructions, and publica-
tions. You will find details on the most recent tax Free Over-the-Phone Interpreter (OPI) Service. The
changes and interactive links to help you find answers IRS is committed to serving taxpayers with limited-English
to your questions. proficiency (LEP) by offering OPI services. The OPI Serv-
ice is a federally funded program and is available at Tax-
• You may also be able to access tax law information in
payer Assistance Centers (TACs), most IRS offices, and
your electronic filing software.
every VITA/TCE tax return site. The OPI Service is acces-
sible in more than 350 languages.
Need someone to prepare your tax return? There are
various types of tax return preparers, including enrolled Accessibility Helpline available for taxpayers with
agents, certified public accountants (CPAs), accountants, disabilities. Taxpayers who need information about ac-
and many others who don’t have professional credentials. cessibility services can call 833-690-0598. The Accessi-
If you choose to have someone prepare your tax return, bility Helpline can answer questions related to current and
choose that preparer wisely. A paid tax preparer is: future accessibility products and services available in al-
ternative media formats (for example, braille, large print,
• Primarily responsible for the overall substantive accu- audio, etc.). The Accessibility Helpline does not have ac-
racy of your return, cess to your IRS account. For help with tax law, refunds, or
• Required to sign the return, and account-related issues, go to IRS.gov/LetUsHelp.

• Required to include their preparer tax identification Note. Form 9000, Alternative Media Preference, or
number (PTIN). Form 9000(SP) allows you to elect to receive certain types
Although the tax preparer always signs the return, of written correspondence in the following formats.
! you're ultimately responsible for providing all the • Standard Print.
CAUTION information required for the preparer to accurately
prepare your return and for the accuracy of every item re- • Large Print.
ported on the return. Anyone paid to prepare tax returns • Braille.
for others should have a thorough understanding of tax

28 Publication 571 (1-2024)

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• Audio (MP3). DirectDeposit for more information on where to find a bank
or credit union that can open an account online.
• Plain Text File (TXT).
• Braille Ready File (BRF). Reporting and resolving your tax-related identity
theft issues.
Disasters. Go to IRS.gov/DisasterRelief to review the
available disaster tax relief. • Tax-related identity theft happens when someone
steals your personal information to commit tax fraud.
Getting tax forms and publications. Go to IRS.gov/ Your taxes can be affected if your SSN is used to file a
Forms to view, download, or print all the forms, instruc- fraudulent return or to claim a refund or credit.
tions, and publications you may need. Or, you can go to • The IRS doesn’t initiate contact with taxpayers by
IRS.gov/OrderForms to place an order. email, text messages (including shortened links), tele-
phone calls, or social media channels to request or
Getting tax publications and instructions in eBook
verify personal or financial information. This includes
format. Download and view most tax publications and in-
requests for personal identification numbers (PINs),
structions (including the Instructions for Form 1040) on
passwords, or similar information for credit cards,
mobile devices as eBooks at IRS.gov/eBooks.
banks, or other financial accounts.
IRS eBooks have been tested using Apple's iBooks for
iPad. Our eBooks haven’t been tested on other dedicated • Go to IRS.gov/IdentityTheft, the IRS Identity Theft
eBook readers, and eBook functionality may not operate Central webpage, for information on identity theft and
as intended. data security protection for taxpayers, tax professio-
nals, and businesses. If your SSN has been lost or
Access your online account (individual taxpayers stolen or you suspect you’re a victim of tax-related
only). Go to IRS.gov/Account to securely access infor- identity theft, you can learn what steps you should
mation about your federal tax account. take.
• View the amount you owe and a breakdown by tax • Get an Identity Protection PIN (IP PIN). IP PINs are
year. six-digit numbers assigned to taxpayers to help pre-
• See payment plan details or apply for a new payment vent the misuse of their SSNs on fraudulent federal in-
plan. come tax returns. When you have an IP PIN, it pre-
vents someone else from filing a tax return with your
• Make a payment or view 5 years of payment history SSN. To learn more, go to IRS.gov/IPPIN.
and any pending or scheduled payments.
Ways to check on the status of your refund.
• Access your tax records, including key data from your
most recent tax return, and transcripts. • Go to IRS.gov/Refunds.
• View digital copies of select notices from the IRS. • Download the official IRS2Go app to your mobile de-
vice to check your refund status.
• Approve or reject authorization requests from tax pro-
fessionals. • Call the automated refund hotline at 800-829-1954.
• View your address on file or manage your communica- The IRS can’t issue refunds before mid-February
tion preferences. ! for returns that claimed the EIC or the additional
CAUTION child tax credit (ACTC). This applies to the entire
Get a transcript of your return. With an online account, refund, not just the portion associated with these credits.
you can access a variety of information to help you during
the filing season. You can get a transcript, review your
Making a tax payment. Go to IRS.gov/Payments for in-
most recently filed tax return, and get your adjusted gross
formation on how to make a payment using any of the fol-
income. Create or access your online account at IRS.gov/
lowing options.
Account.
• IRS Direct Pay: Pay your individual tax bill or estimated
Tax Pro Account. This tool lets your tax professional tax payment directly from your checking or savings ac-
submit an authorization request to access your individual count at no cost to you.
taxpayer IRS online account. For more information, go to
IRS.gov/TaxProAccount. • Debit or Credit Card: Choose an approved payment
processor to pay online or by phone.
Using direct deposit. The safest and easiest way to re- • Electronic Funds Withdrawal: Schedule a payment
ceive a tax refund is to e-file and choose direct deposit, when filing your federal taxes using tax return prepara-
which securely and electronically transfers your refund di- tion software or through a tax professional.
rectly into your financial account. Direct deposit also
avoids the possibility that your check could be lost, stolen, • Electronic Federal Tax Payment System: Best option
destroyed, or returned undeliverable to the IRS. Eight in for businesses. Enrollment is required.
10 taxpayers use direct deposit to receive their refunds. If • Check or Money Order: Mail your payment to the ad-
you don’t have a bank account, go to IRS.gov/ dress listed on the notice or instructions.

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• Cash: You may be able to pay your taxes with cash at about most. If you still need help, TACs provide tax help
a participating retail store. when a tax issue can’t be handled online or by phone. All
TACs now provide service by appointment, so you’ll know
• Same-Day Wire: You may be able to do same-day
in advance that you can get the service you need without
wire from your financial institution. Contact your finan-
long wait times. Before you visit, go to IRS.gov/
cial institution for availability, cost, and time frames.
TACLocator to find the nearest TAC and to check hours,
Note. The IRS uses the latest encryption technology to available services, and appointment options. Or, on the
ensure that the electronic payments you make online, by IRS2Go app, under the Stay Connected tab, choose the
phone, or from a mobile device using the IRS2Go app are Contact Us option and click on “Local Offices.”
safe and secure. Paying electronically is quick, easy, and
faster than mailing in a check or money order. The Taxpayer Advocate Service (TAS)
What if I can’t pay now? Go to IRS.gov/Payments for Is Here To Help You
more information about your options. What Is TAS?
• Apply for an online payment agreement IRS.gov/ (
OPA) to meet your tax obligation in monthly install- TAS is an independent organization within the IRS that
ments if you can’t pay your taxes in full today. Once helps taxpayers and protects taxpayer rights. Their job is
you complete the online process, you will receive im- to ensure that every taxpayer is treated fairly and that you
mediate notification of whether your agreement has know and understand your rights under the Taxpayer Bill
been approved. of Rights.

• Use the Offer in Compromise Pre-Qualifier to see if How Can You Learn About Your Taxpayer
you can settle your tax debt for less than the full
Rights?
amount you owe. For more information on the Offer in
Compromise program, go to IRS.gov/OIC. The Taxpayer Bill of Rights describes 10 basic rights that
all taxpayers have when dealing with the IRS. Go to
Filing an amended return. Go to IRS.gov/Form1040X
TaxpayerAdvocate.IRS.gov to help you understand what
for information and updates.
these rights mean to you and how they apply. These are
Checking the status of your amended return. Go to your rights. Know them. Use them.
IRS.gov/WMAR to track the status of Form 1040-X amen-
ded returns. What Can TAS Do for You?

It can take up to 3 weeks from the date you filed TAS can help you resolve problems that you can’t resolve
! your amended return for it to show up in our sys- with the IRS. And their service is free. If you qualify for
CAUTION tem, and processing it can take up to 16 weeks.
their assistance, you will be assigned to one advocate
who will work with you throughout the process and will do
Understanding an IRS notice or letter you’ve re- everything possible to resolve your issue. TAS can help
ceived. Go to IRS.gov/Notices to find additional informa- you if:
tion about responding to an IRS notice or letter.
• Your problem is causing financial difficulty for you,
Responding to an IRS notice or letter. You can now your family, or your business;
upload responses to all notices and letters using the • You face (or your business is facing) an immediate
Document Upload Tool. For notices that require additional threat of adverse action; or
action, taxpayers will be redirected appropriately on
IRS.gov to take further action. To learn more about the • You’ve tried repeatedly to contact the IRS but no one
has responded, or the IRS hasn’t responded by the
tool, go to IRS.gov/Upload.
date promised.
Note. You can use Schedule LEP (Form 1040), Re-
quest for Change in Language Preference, to state a pref- How Can You Reach TAS?
erence to receive notices, letters, or other written commu-
nications from the IRS in an alternative language. You may TAS has offices in every state, the District of Columbia,
not immediately receive written communications in the re- and Puerto Rico. To find your advocate's number:
quested language. The IRS’s commitment to LEP taxpay- • Go to TaxpayerAdvocate.IRS.gov/Contact-Us;
ers is part of a multi-year timeline that is scheduled to be-
gin providing translations in 2023. You will continue to • Download Pub. 1546, Taxpayer Advocate Service Is
receive communications, including notices and letters in Your Voice at the IRS, available at IRS.gov/pub/irs-pdf/
English until they are translated to your preferred lan- p1546.pdf;
guage. • Call the IRS toll free at 800-TAX-FORM
(800-829-3676) to order a copy of Pub. 1546;
Contacting your local TAC. Keep in mind, many ques-
tions can be answered on IRS.gov without visiting an IRS • Check your local directory; or
TAC. Go to IRS.gov/LetUsHelp for the topics people ask • Call TAS toll free at 877-777-4778.

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How Else Does TAS Help Taxpayers? can represent taxpayers in audits, appeals, and tax collec-
tion disputes before the IRS and in court. In addition,
TAS works to resolve large-scale problems that affect LITCs can provide information about taxpayer rights and
many taxpayers. If you know of one of these broad issues, responsibilities in different languages for individuals who
report it to TAS at IRS.gov/SAMS. speak English as a second language. Services are offered
for free or a small fee. For more information or to find an
Low Income Taxpayer Clinics (LITCs) LITC near you, go to the LITC page at
TaxpayerAdvocate.IRS.gov/about-us/Low-Income-
LITCs are independent from the IRS and TAS. LITCs rep- Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low Income
resent individuals whose income is below a certain level Taxpayer Clinic List at IRS.gov/pub/irs-pdf/p4134.pdf.
and who need to resolve tax problems with the IRS. LITCs

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                    To help us develop a more useful index, please let us know if you have ideas for index entries.
Index               See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
 
                                     Determining   17
403(b) account    3                  Excess amounts   18                  Q
403(b) plans:                        Excess deferrals 18                  qualified birth or adoption                    18
  Basics   3                         Excess elective deferral  18         qualified birth or adoption 
  Benefits  3                        Excise tax 18                         distribution  20
  Participation 4                  Excise tax:                            Qualified domestic relations 
  Self-employed ministers   4        Excess contributions 18               order  22
  What is a 403(b) plan?  3          Reporting requirement  18
  Who can set up a 403(b)                                                 R
   account?    4                   F                                      Reporting contributions:
A                                  Full-time or part-time 11               Chaplains  5
                                                                          Reporting Contributions:
After-tax contributions   4        G                                       Self-employed ministers       5
Assistance (See Tax help)                                                 Required distributions       19
                                   Gift tax 22
                                                                          retirement income accounts                       3 5, 
B                                                                         Retirement savings contributions 
                                   I
Basics 3                                                                   credit  1 26, 
                                   Incidental life insurance   7
Benefits 3                                                                Rollovers 18 20, 
                                   Includible compensation     7
                                                                          Roth contribution program                      11
C                                    403(b) plan  16
                                     Figuring 9
Catch-up contributions    17                                              S
                                     Foreign missionaries 16
Chaplain   4                                                              Salary reduction agreement                       11
                                     Incidental life insurance 7
Church employees     16                                                   Self-employed ministers        4 5 12 16,  ,       , 
                                     Self-employed ministers   16
  Years of service  16
                                   Includible compensation for your 
Contributions   4                    most recent year of service:         T
  After-tax 4                        Definition 6                         Tax help 27
  Catch-up   17                                                           Transfers 19
  Elective deferrals 4 5,          L                                       90-24 transfer  19
  Nonelective  4                   Limit on annual additions    6          Conservatorship   19
  Reporting  5                     Limit on elective deferrals  11         Direct-trustee-to-trustee     20
Correcting excess contributions 17   15-year rule 11                       Insolvency 19
Credit, for retirement savings       Figuring 14                           Permissive service credit                     20
  contributions   26
                                     General limit 11
                                                                          V
D
                                   M                                      Voluntary deductible 
Distributions 18                                                           contributions   22
                                   MAC (See Maximum amount 
  10-year tax option 19              contributable)
  90-24 transfer  19               Maximum amount contributable        5  W
  Deceased employees      22         Components    5                      What is a 403(b) plan?       3
  Direct rollover 22                 How to figure MAC 5
  Eligible retirement plans 21       When to figure MAC   6               Y
  Frozen deposit  22               Minimum required distributions      19 Years of service 11
  Gift tax 22                      Ministers 4 16,                         Church employees     12 16, 
  Minimum required   19            Missing children  2                     Definition 12
  Qualified domestic relations     Most recent year of service    6        Employer's annual work period                     12
   order   22                                                              Full year of service 13
                                   Most recent year of service, 
  Rollovers  20                      figuring 7                            Full-time employee for the full 
  Second rollover  22                                                      year    12
  Transfers  19                    N                                       Full-time for part of the year                13
E                                  Nonelective contributions    4 5,       Other than full-time for the full 
                                                                           year    13
Elective deferrals  4 5,           P                                       Part-time for the full year   13
Eligible employees   4 12,                                                 Part-time for the part of the year                13
                                   Pre-tax contributions  7 10 20 24, , , 
Employer's annual work period  12                                          Self-employed minister      16
                                   Publications (See Tax help)
Excess contributions     17                                                Total years of service      12
  Correcting  17

32                                                                                  Publication 571 (1-2024)

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