Is there any 401K plan that is not subject to FICA?

[Guest Sally Gordon]

Is there any 401K plan that is not subject to FICA?

[Guest Joe Vasko]

No.

[mbozek]

Yes- a pre 1986 401(k) plan established for municipal workers where municipality is exempt from FICA tax.

Also there may be some church sponsored 401(k) plans where the church is exempt from FICA tax or covers self employed ministers exempt from such tax.

There are not too many of the the above around.

[Guest AHayhow]

What if the contributions made into the 401(k) plan are made by the employer under a fringe benefit plan? Are the dollars exempt from federal and state but nonexempt from FICA? Thanks

[david rigby]

Generally, not exempt from FICA. (Might be some exceptions, as described by mbozek, but rare.)

When employer dollars under a Section 125 plan are directed to the 401(k) plan be employee election, they first go into pay, hence subject to FICA taxation. Because they are deferred under a 401(k) election, they are exempt from (federal) income tax. These dollars are subject to the 402(g) limit.