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New Tax Credits for 401(a) plans w/pick ups

Guest lwhittle

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Guest lwhittle

Does anyone know if the new tax credits will apply for mandatory contributions to a governmental plan with 414 "pick-up" provisions?

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  • 2 months later...

It would appear that the answer is no. I.R.C. § 25B, as added by Section 638 of EGTRRA, gives the tax credit only for qualified retirement savings contributions. Qualified retirement savings contributions are defined as follows:


(1) IN GENERAL- The term `qualified retirement savings contributions' means, with respect to any taxable year, the sum of--

(A) the amount of the qualified retirement contributions (as defined in section 219(e)) made by the eligible individual,

(B) the amount of--

(i) any elective deferrals (as defined in section 402(g)(3)) of such individual, and

(ii) any elective deferral of compensation by such individual under an eligible deferred compensation plan (as defined in section 457(B)) of an eligible employer described in section 457(e)(1)(A), and

© the amount of voluntary employee contributions by such individual to any qualified retirement plan (as defined in section 4974©).

This language would not appear to include picked up contributions.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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