Is the MEA Repealed in California?

[Guest scottyd]

Can anyone tell me if they know if the MEA calculation is repealed for the states (specifically California) that do not yet conform to EGTRRA - I would think that it would still apply (as horrible a thought that is). In addition, I think the lack of conformity also stops you from contributing to both a 457 & 403(B) - any words of wisdom on this?

Scott

[Guest Johnny]

On December 28, 2001, Massachusetts issued a proposed technical information release indicating that "In the case of Section 403 plans ...none of the EGTRRA changes are adopted for Massachusetts personal income tax purposes..." Upon reading this, I called a senior official at the Massachusetts Department of Revenue and asked if this really meant the MEA was not repealed. He has not called me back. We're continuing to watch this closely.

Johnny

[Carol V. Calhoun]

This has been a big issue in a number of states. Many of them are considering corrective state legislation. However, state budgetary pressures are in some instances hampering adoption of such legislation. The new IRS 402(f) notice specifically notes that the treatment for state income tax purposes may not mirror that for federal purposes.