403(b) includible compensation

[Ken Davis]

Wondering if someone could tell me the signifance of the word "received" in the 403(b)(3) definition of "includible compensation." Would it be to exclude income recognized under 457(f) but not paid to the employee?

Thanks,

Ken

[PensionPro]

Hope this cite from the EOB moves your analysis forward:

Section 415 compensation includes compensation that is includible in income by reason of IRC §409A or IRC §457(f)(1)(A), or because the amounts are constructively received by the employee. See Treas. Reg. §1.415©-2(b)(7).

[Ken Davis]

Hope this cite from the EOB moves your analysis forward:

Section 415 compensation includes compensation that is includible in income by reason of IRC §409A or IRC §457(f)(1)(A), or because the amounts are constructively received by the employee. See Treas. Reg. §1.415©-2(b)(7).

Thanks, PensionPro. Where I still come up against a wall is a little further in that reg., at -2(g)(1). There, it says that for 403(b) annuity contracts includible comp is determined under 403(b)(3), and that neither the IRC section 415©(3) nor reg. 1.415©-2 rules apply (except for 415©(3)(E), which merely circles back to 403(b)(3)). So, it appears to me that the -2(b)(7) rule for 409A, 457(f) and constructive receipt doesn't apply. Thoughts?

Thanks,

Ken

[PensionPro]

Generally, includible compensation is comp recd from the employer that is includible in the employee's gross income. Certain items are excludible such as 414(h) pickups and 457(f) salary deferrals. Have you found anything in the regs that allows exclusion of amounts constructively received under 457(f)?

[Ken Davis]

Generally, includible compensation is comp recd from the employer that is includible in the employee's gross income. Certain items are excludible such as 414(h) pickups and 457(f) salary deferrals. Have you found anything in the regs that allows exclusion of amounts constructively received under 457(f)?

PensionPro,

No, I can't say that I've found anything that says that in so many words. What causes my confusion is that in the 415©(3) regs, specific mention is made of wages RECEIVED (plus amounts deferred under 457(b) among other deferrals) and then later on amounts INCLUDED under 457(f)(1)(A). Then, in the 403(b)(3) regs, includible compensation means compensation RECEIVED (plus amounts deferred under 457(b) among other deferrals), but no mention of amounts INCLUDED under 457(f)(1)(A). It's the absence of specific mention of 457(f)(1)(A) in the 403(b)(3) regs that is confusing. I can't help but wonder why mention of 457(f)(1)(A) was omitted in the 403(b)(3) regs but is found in the 415©(3) regs?

Thanks,

Ken