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Exceeding 402g and 415c limits...


K-t-F

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I have someone who is part of a 457 plan and wants to establish a Solo 401K plan (I guess he has a side job). He tells me he can make salary deferrals to the 457 and to the 401k which of course would exceed the 402g limit. Is this true? do you not count deferrals to 457 plans as part of the 402g limit?

Is it the same rule with 403b plans? (I know, this is the 457 board but I thought you guys would know). A CPA is telling me he has a similar situation where a client can actually end up contribution $41,000 to his 401a plan and defer $16,000 to his 403b for a total of $57,000.

Thanks!

Its not easy being green

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403b, 401k and simple elective contributions are aggregated for the 13k/16 limit under 402g. 457 elective contributions have a separate 13k limit.

403b contributions including elective deferrals can total 41k and employee who is not > 50% owner of a business can have separate 415 limits for a 403b plan and qual plan. >50%owner must aggregate contributions to qual plan with 403b plan contributions (but not 457 plan) for 415 limits.

mjb

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A common mistake is to apply the >50% rules for 415 limits to brother-sister controlled groups when they only apply to parent-subsidiary controlled groups.

Although, now I see this fine point I was making is moot here. I see now what you are saying Mbozek.

"What's in the big salad?"

"Big lettuce, big carrots, tomatoes like volleyballs."

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Ok... thanks. What I am getting out of this is nothing new... except for the 457 13k limit which is NOT part of the 402g limit.

A participant in a 457 plan can defer 13k and if s/he is part of a qual plan can also defer 13K... correct? can actually end up deferring 26k for the year if it done that way.

Its not easy being green

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  • 2 months later...

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