Are aftertax contribs. allowed & what is the authority?

[Guest Gloria Goldberg]

Are aftertax contributions allowed under money purchase plans and what is the authority for this?

[J Simmons]

I think so.

See Rev. Rul. 74-385

See also H. Rept. 93-1280 (Conf.)(1974), 1974-3 C.B. 415, 452-453; H. Rept. 93-779 (1974), 1974-3 C.B. 244, 332-333; H. Rept. 93-807 (1974), 1974-3 C.B. (Supp.) 236, 325-326.

[Bird]

I think they are permitted too. Whether it is advisable or not is a different issue. "Back in the day" (pre-'86 I believe) participants could do a 6% after-tax contribution as a freebie...not counted as an annual addition, and not subject to any testing. Now, they are annual additions, and also subject to ACP testing. Useless as [insert your favorite], IMO.

[Guest Gloria Goldberg]

I think so.

See Rev. Rul. 74-385

See also H. Rept. 93-1280 (Conf.)(1974), 1974-3 C.B. 415, 452-453; H. Rept. 93-779 (1974), 1974-3 C.B. 244, 332-333; H. Rept. 93-807 (1974), 1974-3 C.B. (Supp.) 236, 325-326.

Thank you for your assistance.

G. Goldberg

[Guest Gloria Goldberg]

Thank you for your assistance.

G. Goldberg