457B vs 401K - Employer Contributions and FICA/Med

[Guest jrschmid]

What is the distinction between employer contributions to a 457(b) plan and a 401(k) plan that makes the employer contributions to a 457 reportable as earnings and taxable for FICA/Med/FUTA but not employer contributions to a 401(k) plan?

I've attached a copy of IRS notice 2003-20 for reference. See section VI - pp 9-12.

457B_IRS_Guidelines.pdf

[jpod]

Are you asking IF the treatment is different (it is) or WHY it is different. I'm not sure I can explain WHY it's different, other than that Congress saw fit to exclude employer contributions to 401k plans and other plans qualified under Section 401(a), whereas it wished to subject nonqualified deferred compensation (including employer contributions to 457b plans) when it became vested.

[Guest jrschmid]

Yes - I was really looking for a reason why but thanks for confirming the fact that it IS different!