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Roth 403(b) Contributions and W2 reporting


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It appears that Roth 403(b) contributions in included in the W2 Box 1 calculation of wages and also noted with code BB in box 12.  Can the employee Roth 403(b) contribution be used to satisfy the earned income test associated with making contributions to a outside traditional or Roth IRA. 

Said another way... Assuming no other earned income, if MFJ, can a $13K after tax employee contribution to a Roth 403(b) be used to meet the earned income test to allow additional 2x6.5k contributions to a couple's Roth IRAs? 

 

 

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John Cross, probably. I don't think there is anything on it. If the IRS wanted to say "no," they could probably argue that, while taxable, the Roth contribution is not "compensation" under Treas. reg. 1.219-1(c), because not really "wages,...[etc.]." Note that 402A(a)(1) doesn't call the Roth contribution wages, just says it is not excludable. But in the absence of guidance, my guess is you can do it. I don't think there is any guidance on this. Maybe someone else will have more information.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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