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Tribal 401(k)--deferrals from nontaxable income?

Guest Kathleen Meagher

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Guest Kathleen Meagher

Income from certain fishing activities is not taxable to Native American tribal employees. How should this income be treated for purposes of the tribe's 401(k) profit sharing plan? My theory is that compensation for deferral and contribution purposes can be defined to include fishing income, but that for 415 purposes, only W-2 income (plus 401(k), cafeteria plan and transporatation plan deferrals) can be counted.

I haven't found any guidance on this, so my theory is based upon an analogy to the treatment of nontaxable parsonage income for clergy in qualified plans (as I understand it after a brief review).

Any thoughts?

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