414(h)(2) County Retirement

[JenMO]

County employee has this on his W-2 form listed in box 14. His wages are reduced by this much. Does this qualify for the retirement credit? I called IRS on this once and they said it qualified, but I'm not sure. I don't think it's voluntary. Would that be why it is in box 14? Appreciate any help.

[Bees Knees]

IRS Pub 590 says:

Eligible contributions. These include:
1. Contributions to a traditional or Roth IRA,
2. Salary reduction contributions (elective deferrals, including
amounts designated as after-tax Roth contributions
to):
a. A 401(k) plan (including a SIMPLE 401(k)),
b. A section 403(b) annuity,
c. An eligible deferred compensation plan of a state
or local government (a governmental 457 plan),
d. A SIMPLE IRA plan, or
e. A salary reduction SEP, and
3. Contributions to a section 501(c)(18) plan.
They also include voluntary after-tax employee contributions
to a tax-qualified retirement plan or section 403(b)
annuity. For purposes of the credit, an employee contri-
bution will be voluntary as long as it is not required as a
condition of employment.

Your county retirement may fit one of the above if it is voluntary. Everything described above is something that the employee can voluntarily contribute money to. If your county plan is not voluntary, I don't think it would qualify.

[travis bickle]

as i see it, 414(h)(2) plans

County employee has this on his W-2 form listed in box 14. His wages are reduced by this much. Does this qualify for the retirement credit? I called IRS on this once and they said it qualified, but I'm not sure. I don't think it's voluntary. Would that be why it is in box 14? Appreciate any help.

are not voluntary [in the eyes of the irs].

i have NO direct experience with this type of plan, either by participating in one, or by having a client participating in one.

that said, here is the actual sub-paragraph from the irc:
(2) Designation by units of government
For purposes of paragraph (1), in the case of any plan established by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing, where the contributions of employing units are designated as employee contributions but where any employing unit picks up the contributions, the contributions so picked up shall be treated as employer contributions.

so, the irc says 414(h)(2) plans are treated as EMPLOYER contributions, not employee, when/if the employer picks up the contributions.

here is the url where i got the above information:

http://www.fourmilab.ch/ustax/www/t26-A-1-D-I-B-414.html

hope this helps