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ACP Testing For Church 403(b)


Guest wolfman

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Guest wolfman

Is 401(m) testing necessary for a 403(B) plan maintained a a church organization? Deferral and match are the only contributions.

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Guest Danny Miller

403(B) plans of churches and qualified church controlled organizations are not subject to 401(m) testing under Code section 403(B)(12). 403(B) plans of "non-QCCOs" (e.g., those of church related hospitals and universities) are subject to such testing. Hope this helps.

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Guest wolfman

Thanks so much. Is there a good site that explains what the church plan is (and is not) subject to?

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The determination of whether a plan is for a church is a complex question and requires review by tax counsel. Most of the answers on church plans come from private letter rulings issued by the IRS under IRC 414(e). Some activities such as hospitals may be considered church plans if operated by a religious organization as part of its religious activities or mission.

mjb

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Guest Danny Miller

Panel Publishers has produced a book in their Pension Answer Book Series that is titled "The 403(B) Answer Book." David Powell and I co-authored a chapter in that book that describes the rules that apply (and don't apply) to 403(B) and 401(a) qualified plans. The chapter also discusses the basic requirements for church plan status. That is the best place I know to go to for information on the various tax Code rules for church plans (some pride of authorship is probably involved in my recommendation). You can reach Panel's customer service department at 800-234-1660. (I don't receive any monetary reward if you buy the book from them!!)

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