457(b) and State Taxes

[Guest lkazden]

We are implementing a 457(B) plan for the top hat group of a non-profit organization. Obviously, the money deferred by the participants will not be taxable for Federal purposes at the time of deferral. However, are the funds subject to state taxes at the time of deferral ? Does it vary by state to state?

I appreciate your input.

LBK

[mbozek]

It depends on the state. For example, NJ taxes deferrals under 457 plans but not 401(K) salary reduction. It is up to each state to decide whether to tax such deferrals. Ned to check with a tax advisor to find out st . taxation.