Loans

[Guest BruceCM]

This is a kind of basic question....are all vested amounts in an EE's 401(k) eligible to be considered for a loan? I remember reading somewhere that ER non-elective contributions are not, but I cannot find that in any of my sources.

Thanks

[WDIK]

IRC 72(p)(2)(A)(ii)(I) addresses the limitation to the allowable loan amount that ties in to the accrued benefit. The limitation is "one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan".

Section 72(p)(2)(A) also indicates that "[f]or purposes of clause (ii), the present value of the nonforfeitable accrued benefit shall be determined without regard to any accumulated deductible employee contributions". (emphasis added)

The law permitting deductible employee contributions was repealed.