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Https Taxes Hrblock Com

Https taxes hrblock com Index A Affiliated corporations, Aircraft used by affiliated corporations. Https taxes hrblock com Agri-biodiesel, defined, Agri-biodiesel. Https taxes hrblock com Air transportation taxes, Air Transportation Taxes 225-mile-zone rule, Taxable transportation. Https taxes hrblock com Alaska, Transportation between the continental U. Https taxes hrblock com S. Https taxes hrblock com and Alaska or Hawaii. Https taxes hrblock com , Transportation within Alaska or Hawaii. Https taxes hrblock com , Alaska and Hawaii. Https taxes hrblock com Baggage, Excess baggage. Https taxes hrblock com Bonus tickets, Bonus tickets. Https taxes hrblock com Credits or refunds, Credits or refunds. Https taxes hrblock com Exemptions, Exemptions. Https taxes hrblock com Export, Exportation. Https taxes hrblock com Fixed-wing aircraft, Fixed-wing aircraft uses. Https taxes hrblock com Hawaii, Transportation between the continental U. Https taxes hrblock com S. Https taxes hrblock com and Alaska or Hawaii. Https taxes hrblock com , Transportation within Alaska or Hawaii. Https taxes hrblock com , Alaska and Hawaii. Https taxes hrblock com Helicopters, Certain helicopter uses. Https taxes hrblock com , Transportation of Property by Air International air travel facilities, International Air Travel Facilities Military personnel, Military personnel on international trips. Https taxes hrblock com Package tours, Package tours. Https taxes hrblock com Persons by air, Transportation of Persons by Air Persons liable, Liability for tax. Https taxes hrblock com , Liability for tax. Https taxes hrblock com Property by air, Transportation of Property by Air Tax rates, Transportation of Persons by Air Taxable transportation, Taxable transportation. Https taxes hrblock com Travel agency, Liability for tax. Https taxes hrblock com Uninterrupted international, Uninterrupted international air transportation. Https taxes hrblock com Aircraft, Fixed-wing aircraft uses. Https taxes hrblock com Affiliated corporations, Aircraft used by affiliated corporations. Https taxes hrblock com Small planes, Small aircraft. Https taxes hrblock com Aircraft museum, In an aircraft or vehicle owned by an aircraft museum (No. Https taxes hrblock com 15). Https taxes hrblock com Alaska Air transportation taxes, Transportation between the continental U. Https taxes hrblock com S. Https taxes hrblock com and Alaska or Hawaii. Https taxes hrblock com Tax on diesel fuel or kerosene, Removal for sale or use in Alaska. Https taxes hrblock com Alcohol and tobacco taxes, Excise Taxes Not Covered Alternative fuel credit, Alternative fuel credit. Https taxes hrblock com Alternative fuel, defined, Other fuels. Https taxes hrblock com American Red Cross, International organizations and the American Red Cross. Https taxes hrblock com Answering service, Answering services. Https taxes hrblock com Appeal procedures, Examination and Appeal Procedures Approved refinery, defined, Approved terminal or refinery. Https taxes hrblock com Approved terminal, defined, Approved terminal or refinery. Https taxes hrblock com Arrow shafts, Arrow Shafts Assistance (see Tax help) Aviation gasoline, defined, Aviation gasoline. Https taxes hrblock com B Back-up tax, Back-up Tax Biodiesel, defined, Biodiesel. Https taxes hrblock com Blended taxable fuel, defined, Blended taxable fuel. Https taxes hrblock com Blender, defined, Blender. Https taxes hrblock com Blocked pump, Blocked pump. Https taxes hrblock com Blood collector organizations, qualified, Exclusive use by a qualified blood collector organization (No. Https taxes hrblock com 11). Https taxes hrblock com , Qualified blood collector organizations. Https taxes hrblock com Boats, In a boat engaged in commercial fishing (No. Https taxes hrblock com 4). Https taxes hrblock com Bonus tickets, Bonus tickets. Https taxes hrblock com Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Bulk transfer, defined, Bulk transfer. Https taxes hrblock com Bulk transfer/terminal system, defined, Bulk transfer/terminal system. Https taxes hrblock com Buses, In certain intercity and local buses (No. Https taxes hrblock com 5). Https taxes hrblock com , In a qualified local bus (No. Https taxes hrblock com 6). Https taxes hrblock com , In a school bus (No. Https taxes hrblock com 7). Https taxes hrblock com Tire tax, Qualifying intercity or local bus. Https taxes hrblock com C Cellulosic biofuel, Cellulosic biofuel. Https taxes hrblock com Chemicals, ozone-depleting, Environmental Taxes Claims Claiming a credit, Claiming a Credit on Form 4136 Claiming a refund, Claiming A Refund Filing claims, Filing Claims Coal Blending, Blending. Https taxes hrblock com Exemptions, Exemption from tax. Https taxes hrblock com Producer, Coal Production, Coal production. Https taxes hrblock com Selling price, Determining tonnage or selling price. Https taxes hrblock com Tax rates, Tax rates. Https taxes hrblock com Coin-operated telephones, Coin-operated telephones. Https taxes hrblock com Comments, Comments and suggestions. Https taxes hrblock com Commercial aviation, In commercial aviation (other than foreign trade). Https taxes hrblock com Commercial fishing, In a boat engaged in commercial fishing (No. Https taxes hrblock com 4). Https taxes hrblock com Commercial waterway transportation, Commercial waterway transportation. Https taxes hrblock com Communications taxes Credits or refunds, Credits or Refunds Exemptions, Exemptions Figuring the tax, Figuring the tax. Https taxes hrblock com Local telephone service, Local telephone service. Https taxes hrblock com Local-only service, Local-only service. Https taxes hrblock com Private communication service, Private communication service. Https taxes hrblock com Teletypewriter exchange service, Teletypewriter exchange service. Https taxes hrblock com Credit card purchases Aviation gasoline, Credit card purchases. Https taxes hrblock com Gasoline, Credit card purchases. Https taxes hrblock com Kerosene for use in aviation, Credit card purchases. Https taxes hrblock com Undyed diesel fuel, Credit Card Purchases. Https taxes hrblock com Undyed kerosene, Credit Card Purchases. Https taxes hrblock com Credit or refund Gas guzzler tax, Credit or refund. Https taxes hrblock com Manufacturers taxes, Credits or Refunds Resale of tax-paid semitrailers, Tax on resale of tax-paid trailers and semitrailers. Https taxes hrblock com Retail tax, Credits or refunds. Https taxes hrblock com Tire tax, Credit or refund. Https taxes hrblock com Vaccines, Credit or refund. Https taxes hrblock com Credits, Claiming a Credit on Form 4136 D Deposits Net tax liability, Amount of Deposits Deposits, How to make, How To Make Deposits Diesel fuel Definitions, Diesel Fuel and Kerosene Exported, Diesel Fuel and Kerosene Diesel-water fuel emulsion, defined, Diesel-water fuel emulsion. Https taxes hrblock com Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E Electric outboard motors, Electric outboard boat motors. Https taxes hrblock com Enterer, defined, Enterer. Https taxes hrblock com Entry, defined, Entry. Https taxes hrblock com Environmental taxes Credit or refund, Credits or refunds. Https taxes hrblock com Exceptions, Exceptions. Https taxes hrblock com Ozone-depleting chemicals (ODCs), Environmental Taxes United States (defined), Environmental Taxes Examination procedures, Examination and Appeal Procedures Excluded liquid, Diesel Fuel and Kerosene Exempt articles, retail tax, Articles exempt from tax. Https taxes hrblock com Exempt communication services American Red Cross, International organizations and the American Red Cross. Https taxes hrblock com Answering service, Answering services. Https taxes hrblock com Coin-operated telephones, Coin-operated telephones. Https taxes hrblock com Installation charges, Installation charges. Https taxes hrblock com International organizations, International organizations and the American Red Cross. Https taxes hrblock com Mobile radio telephone service, Mobile radio telephone service. Https taxes hrblock com News services, News services. Https taxes hrblock com Nonprofit educational organizations, Nonprofit educational organizations. Https taxes hrblock com Nonprofit hospitals, Nonprofit hospitals. Https taxes hrblock com Private communication service, Private communication service. Https taxes hrblock com Qualified blood collector organizations, Qualified blood collector organizations. Https taxes hrblock com Radio broadcasts, News services. Https taxes hrblock com Security systems, Telephone-operated security systems. Https taxes hrblock com Exempt sales, heavy trucks, Sales exempt from tax. Https taxes hrblock com Exemptions Air transportation taxes, Exemptions. Https taxes hrblock com Bonus tickets, Bonus tickets. Https taxes hrblock com Coal, Exemption from tax. Https taxes hrblock com Communications taxes, Exemptions Federal government, Federal, state, and local government. Https taxes hrblock com Fixed-wing aircraft, Fixed-wing aircraft uses. Https taxes hrblock com For export, Exemptions Further manufacturing, Exemptions Helicopters, Certain helicopter uses. Https taxes hrblock com Indian handicrafts, Exemptions Indian tribal governments, Federal, state, and local government. Https taxes hrblock com Military personnel, Military personnel on international trips. Https taxes hrblock com Nonprofit educational organizations, Federal, state, and local government. Https taxes hrblock com , Exemptions Qualified blood collector organizations, Exemptions State and local governments, Federal, state, and local government. Https taxes hrblock com , Exemptions Taxable tires, Tires exempt from tax. Https taxes hrblock com Vessel supplies, Exemptions Export, Export (No. Https taxes hrblock com 3). Https taxes hrblock com Exported taxable fuel, Exported taxable fuel. Https taxes hrblock com F Farming, On a farm for farming purposes (No. Https taxes hrblock com 1). Https taxes hrblock com Federal government, Federal, state, and local government. Https taxes hrblock com Fishing, In a boat engaged in commercial fishing (No. Https taxes hrblock com 4). Https taxes hrblock com Fishing rods and fishing poles. Https taxes hrblock com , Fishing rods and fishing poles. Https taxes hrblock com Fishing tackle boxes, Fishing tackle boxes. Https taxes hrblock com Fixed-wing aircraft, Fixed-wing aircraft uses. Https taxes hrblock com Floor stocks tax Ozone-depleting chemicals, Floor Stocks Tax Floor stocks, ODCs, Environmental Taxes Foreign trade, In foreign trade (No. Https taxes hrblock com 9). Https taxes hrblock com Form 1363, Exportation. Https taxes hrblock com 4136, Claiming a Credit on Form 4136 6197, Gas Guzzler Tax, Form 6197. Https taxes hrblock com , Attachments to Form 720. Https taxes hrblock com 637, Reminders 6627, Environmental Taxes, Attachments to Form 720. Https taxes hrblock com 720, Claiming A Refund, Form 6197. Https taxes hrblock com , Filing Form 720 720X, Form 720X. Https taxes hrblock com 8849, Claiming A Refund 8864, Biodiesel Sold as But Not Used as Fuel Form 720 Attachments, Attachments to Form 720. Https taxes hrblock com Due dates, Due dates. Https taxes hrblock com Final return, Final return. Https taxes hrblock com Schedule A, Filing Form 720 Schedule C, Filing Form 720 Schedule T, Filing Form 720 Free tax services, How To Get Tax Help Fuels Alternative fuel, Other Fuels (Including Alternative Fuels) Diesel, Diesel Fuel and Kerosene Diesel-water fuel emulsion, Diesel-Water Fuel Emulsion For use in aviation, Kerosene for Use in Aviation Gasoline, Gasoline and Aviation Gasoline Kerosene, Diesel Fuel and Kerosene Other Fuels, Other Fuels (Including Alternative Fuels) Used on inland waterways, Fuels Used on Inland Waterways G Gambling, Taxable situations. Https taxes hrblock com Gas guzzler tax Automobiles, Automobiles. Https taxes hrblock com Credit or refund, Credit or refund. Https taxes hrblock com Limousines, Automobiles. Https taxes hrblock com Vehicles not subject to tax, Vehicles not subject to tax. Https taxes hrblock com Gasoline blendstocks, Gasoline Blendstocks Gasoline, defined, Gasoline. Https taxes hrblock com H Hawaii, air transportation taxes, Transportation between the continental U. Https taxes hrblock com S. Https taxes hrblock com and Alaska or Hawaii. Https taxes hrblock com Heavy Motor Vehicle User Fee, Excise Taxes Not Covered Heavy trucks First retail sale, defined, First retail sale defined. Https taxes hrblock com Further manufacture, Further manufacture. Https taxes hrblock com Installment sales, Installment sales. Https taxes hrblock com Parts or accessories, Parts or accessories. Https taxes hrblock com Presumptive retail sales price, Presumptive retail sales price. Https taxes hrblock com Related persons, Related person. Https taxes hrblock com Separate purchases, Separate purchase. Https taxes hrblock com Tax base, Determination of tax base. Https taxes hrblock com Tax rate, Retail Tax on Heavy Trucks, Trailers, and Tractors Helicopter, Certain helicopter uses. Https taxes hrblock com Help (see Tax help) Highway vehicle, Highway vehicle. Https taxes hrblock com , In a highway vehicle owned by the United States that is not used on a highway (No. Https taxes hrblock com 12). Https taxes hrblock com Highway vehicle (Diesel-powered), Diesel-powered highway vehicle. Https taxes hrblock com I Identifying number, Taxpayer identification number. Https taxes hrblock com Imported taxable products (ODCs), Imported Taxable Products Income, include in, Including the Credit or Refund in Income Indoor tanning services, Indoor Tanning Services Tax Information returns, liquid products, Information Returns Inland waterways, Fuels Used on Inland Waterways Intercity and local buses, In certain intercity and local buses (No. Https taxes hrblock com 5). Https taxes hrblock com Interest and penalties, Penalties and Interest International air travel facilities, International Air Travel Facilities K Kerosene Definitions, Diesel Fuel and Kerosene Exported, Diesel Fuel and Kerosene For use in aviation, Kerosene for Use in Aviation L Liquid products, information returns, Information Returns Local telephone service, Local telephone service. Https taxes hrblock com Local-only service, Local-only service. Https taxes hrblock com M Manufacturer, defined, Manufacturer. Https taxes hrblock com Manufacturers taxes Arrow shafts, Arrow Shafts Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Coal, Coal Credits or refunds, Credits or Refunds Exemptions, Exemptions Gas guzzler tax, Gas Guzzler Tax Lease, Lease considered sale. Https taxes hrblock com Lease payments, Partial payments. Https taxes hrblock com Partial payments, Partial payments. Https taxes hrblock com Registration, Registration requirements. Https taxes hrblock com Related person, Related person. Https taxes hrblock com Requirements for exempt sales, Requirements for Exempt Sales Sale, Sale. Https taxes hrblock com Sport fishing equipment, Sport Fishing Equipment Taxable Tires, Taxable Tires Vaccines, Vaccines Medical device tax, Taxable medical devices. Https taxes hrblock com Military aircraft, In military aircraft (No. Https taxes hrblock com 16). Https taxes hrblock com Mobile radio telephone service, Mobile radio telephone service. Https taxes hrblock com N News services, News services. Https taxes hrblock com Nonprofit educational organization, Exclusive use by a nonprofit educational organization (No. Https taxes hrblock com 13). Https taxes hrblock com Nonprofit educational organization use and state use, Nonprofit educational organization and state use. Https taxes hrblock com Nonprofit educational organizations, Nonprofit educational organizations. Https taxes hrblock com , Federal, state, and local government. Https taxes hrblock com Nontaxable uses, definitions, Definitions of Nontaxable Uses Nontaxable uses, type of use table, Definitions of Nontaxable Uses O Obligations not in registered form, Obligations Not in Registered Form Off-highway use, Off-highway business use (No. Https taxes hrblock com 2). Https taxes hrblock com Oil spill liability, Environmental Taxes Other Fuels (Including Alternative Fuels), Other Fuels (Including Alternative Fuels) Other fuels, defined, Other fuels. Https taxes hrblock com Ozone-depleting chemicals Floor stocks tax, Floor Stocks Tax Imported taxable products, Imported Taxable Products P Patient-centered outcomes research fee, Patient-Centered Outcomes Research Fee Payment of taxes, Payment of Taxes Penalties Dyed diesel fuel, Penalty. Https taxes hrblock com Dyed kerosene, Penalty. Https taxes hrblock com Pipeline operator, defined, Pipeline operator. Https taxes hrblock com Position holder, defined, Position holder. Https taxes hrblock com Publications (see Tax help) Q Qualified local bus, In a qualified local bus (No. Https taxes hrblock com 6). Https taxes hrblock com R Rack, defined, Rack. Https taxes hrblock com Radio broadcasts, News services. Https taxes hrblock com Records, Refiner, defined, Refiner. Https taxes hrblock com Refinery, defined, Refinery. Https taxes hrblock com Refunds, Claiming A Refund Refunds of second tax, Refunds of Second Tax Registered ultimate vendor, Sales by Registered Ultimate Vendors, Registered ultimate vendor. Https taxes hrblock com Registrant, Taxable fuel registrant. Https taxes hrblock com Registrant, defined, Registrant. Https taxes hrblock com Registration, Registration Requirements Form 637, Reminders Registration-required obligations, Obligations Not in Registered Form Related persons Heavy trucks, Related person. Https taxes hrblock com Sport fishing equipment, Related person. Https taxes hrblock com Removal, defined, Removal. Https taxes hrblock com Retail tax Credits or refunds, Credits or refunds. Https taxes hrblock com Heavy trucks, Retail Tax on Heavy Trucks, Trailers, and Tractors Rulings Program, Rulings Program Rural airports, Rural airports. Https taxes hrblock com S Sale, defined, Sale. Https taxes hrblock com Sales by registered ultimate vendors, gasoline, Sales by registered ultimate vendors. Https taxes hrblock com Sales by registered ultimate vendors, kerosene for use in aviation, Sales by Registered Ultimate Vendors Sales price Bonus goods, Bonus goods. Https taxes hrblock com Cost of transportation, Manufacturers taxes based on sale price. Https taxes hrblock com Delivery costs, Manufacturers taxes based on sale price. Https taxes hrblock com Discounts, Manufacturers taxes based on sale price. Https taxes hrblock com Installation costs, Manufacturers taxes based on sale price. Https taxes hrblock com Insurance costs, Manufacturers taxes based on sale price. Https taxes hrblock com Local advertising charges, Manufacturers taxes based on sale price. Https taxes hrblock com Manufacturers excise tax, Manufacturers taxes based on sale price. Https taxes hrblock com Rebates, Manufacturers taxes based on sale price. Https taxes hrblock com Retail dealer preparation costs, Manufacturers taxes based on sale price. Https taxes hrblock com Warranty charges, Manufacturers taxes based on sale price. Https taxes hrblock com School bus, In a school bus (No. Https taxes hrblock com 7). Https taxes hrblock com Second generation biofuel, Second generation biofuel. Https taxes hrblock com Security systems, Telephone-operated security systems. Https taxes hrblock com Ship passenger tax, Ship Passenger Tax Special September rule, When to deposit, Special rule for deposits of taxes in September. Https taxes hrblock com Sport fishing equipment List of equipment, Sport Fishing Equipment Resales, Certain equipment resale. Https taxes hrblock com State and local governments, Federal, state, and local government. Https taxes hrblock com State or local governments, Exclusive use by a state, political subdivision of a state, or the District of Columbia (No. Https taxes hrblock com 14). Https taxes hrblock com State or nonprofit educational organization use, Sales by registered ultimate vendors. Https taxes hrblock com State use, Registered ultimate vendor (state use). Https taxes hrblock com , State use. Https taxes hrblock com State, defined, State. Https taxes hrblock com Suggestions, Comments and suggestions. Https taxes hrblock com T Tanning tax, Indoor Tanning Services Tax Tax help, How To Get Tax Help Tax rate, Electric outboard boat motors. Https taxes hrblock com Air transportation of persons, Transportation of Persons by Air Air transportation of property, Transportation of Property by Air Arrow shafts, Arrow Shafts Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Coal, Tax rates. Https taxes hrblock com Electric outboard motor, Electric outboard boat motors. Https taxes hrblock com International air travel facilities, International Air Travel Facilities Obligations not in registered form, Obligations Not in Registered Form Policies issued by foreign persons, Foreign Insurance Taxes Ship passenger tax, Ship Passenger Tax Sport fishing equipment, Sport Fishing Equipment Trucks, Retail Tax on Heavy Trucks, Trailers, and Tractors Taxable fuel registrant, Taxable fuel registrant. Https taxes hrblock com Taxable Tires Manufacturers taxes, Taxable Tires Taxable tires Exemptions, Tires exempt from tax. Https taxes hrblock com Taxes, Payment of, Payment of Taxes Taxpayer identification number, Taxpayer identification number. Https taxes hrblock com Teletypewriter exchange service, Teletypewriter exchange service. Https taxes hrblock com Terminal operator, defined, Terminal operator. Https taxes hrblock com Terminal, defined, Terminal. Https taxes hrblock com Throughputter, defined, Throughputter. Https taxes hrblock com Tires Credit against heavy truck tax, Tire credit. Https taxes hrblock com Credit or refund of tax, Credit or refund. Https taxes hrblock com Train, Use in a train. Https taxes hrblock com Train (Diesel-powered), Diesel-powered train. Https taxes hrblock com Transmix, Diesel Fuel and Kerosene Travel agency, Liability for tax. Https taxes hrblock com TTY/TDD information, How To Get Tax Help Two-party exchanges, Two-party exchanges. Https taxes hrblock com , Two-party exchanges. Https taxes hrblock com U Ultimate purchaser, Ultimate purchaser. Https taxes hrblock com Uninterrupted international air transportation, Uninterrupted international air transportation. Https taxes hrblock com , Military personnel on international trips. Https taxes hrblock com Used other than as a fuel Diesel fuel and kerosene, For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel (No. Https taxes hrblock com 8). Https taxes hrblock com Uses, nontaxable Alternative fuels, Other Fuels (Including Alternative Fuels) Aviation gasoline, Gasoline and Aviation Gasoline Diesel fuel, Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) Diesel-water fuel emulsion, Diesel-Water Fuel Emulsion Gasoline, Gasoline and Aviation Gasoline Kerosene, Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) Kerosene for use in aviation, Ultimate purchasers. Https taxes hrblock com Liquefied petroleum gas (LPG), Other Fuels (Including Alternative Fuels) Other Fuels, Other Fuels (Including Alternative Fuels) V Vaccines Credit or refund, Credit or refund. Https taxes hrblock com Manufacturers tax, What's New, Vaccines Vehicles Gas guzzler, Gas Guzzler Tax Imported, Imported automobiles. Https taxes hrblock com Law enforcement, Vehicles not subject to tax. Https taxes hrblock com Vendors, registered ultimate, Sales by Registered Ultimate Vendors, Registered ultimate vendor. Https taxes hrblock com Vessel operator, defined, Vessel operator. Https taxes hrblock com W Wagering and occupational wagering fee, Excise Taxes Not Covered When to deposit, When To Make Deposits Prev  Up     Home   More Online Publications
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Https taxes hrblock com 4. Https taxes hrblock com   Qualified Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Kinds of PlansDefined Contribution Plan Defined Benefit Plan Qualification RulesEarly retirement. Https taxes hrblock com Loan secured by benefits. Https taxes hrblock com Waiver of survivor benefits. Https taxes hrblock com Waiver of 30-day waiting period before annuity starting date. Https taxes hrblock com Involuntary cash-out of benefits not more than dollar limit. Https taxes hrblock com Exception for certain loans. Https taxes hrblock com Exception for QDRO. Https taxes hrblock com SIMPLE and safe harbor 401(k) plan exception. Https taxes hrblock com Setting Up a Qualified PlanAdopting a Written Plan Investing Plan Assets Minimum Funding RequirementDue dates. Https taxes hrblock com Installment percentage. Https taxes hrblock com Extended period for making contributions. Https taxes hrblock com ContributionsEmployer Contributions Employee Contributions When Contributions Are Considered Made Employer DeductionDeduction Limits Deduction Limit for Self-Employed Individuals Where To Deduct Contributions Carryover of Excess Contributions Excise Tax for Nondeductible (Excess) Contributions Elective Deferrals (401(k) Plans)Limit on Elective Deferrals Automatic Enrollment Treatment of Excess Deferrals Qualified Roth Contribution ProgramElective Deferrals Qualified Distributions Reporting Requirements DistributionsRequired Distributions Distributions From 401(k) Plans Tax Treatment of Distributions Tax on Early Distributions Tax on Excess Benefits Excise Tax on Reversion of Plan Assets Notification of Significant Benefit Accrual Reduction Prohibited TransactionsTax on Prohibited Transactions Reporting RequirementsOne-participant plan. Https taxes hrblock com Caution: Form 5500-EZ not required. Https taxes hrblock com Form 5500. Https taxes hrblock com Electronic filing of Forms 5500 and 5500-SF. Https taxes hrblock com Topics - This chapter discusses: Kinds of plans Qualification rules Setting up a qualified plan Minimum funding requirement Contributions Employer deduction Elective deferrals (401(k) plans) Qualified Roth contribution program Distributions Prohibited transactions Reporting requirements Useful Items - You may want to see: Publications 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 3066 Have you had your Check-up this year? for Retirement Plans 3998 Choosing A Retirement Solution for Your Small Business 4222 401(k) Plans for Small Businesses 4530 Designated Roth Accounts under a 401(k), 403(b), or governmental 457(b) plans 4531 401(k) Plan Checklist 4674 Automatic Enrollment 401(k) Plans for Small Businesses 4806 Profit Sharing Plans for Small Businesses Forms (and Instructions) www. Https taxes hrblock com dol. Https taxes hrblock com gov/ebsa/pdf/2013-5500. Https taxes hrblock com pdf www. Https taxes hrblock com dol. Https taxes hrblock com gov/ebsa/pdf/2013-5500-SF. Https taxes hrblock com pdf W-2 Wage and Tax Statement Schedule K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. Https taxes hrblock com 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Https taxes hrblock com 1040 U. Https taxes hrblock com S. Https taxes hrblock com Individual Income Tax Return Schedule C (Form 1040) Profit or Loss From Business Schedule F (Form 1040) Profit or Loss From Farming 5300 Application for Determination for Employee Benefit Plan 5310 Application for Determination for Terminating Plan 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 5330 Return of Excise Taxes Related to Employee Benefit Plans 5500 Annual Return/Report of Employee Benefit Plan. Https taxes hrblock com For copies of this form, go to: 5500-EZ Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan. Https taxes hrblock com For copies of this form, go to: 8717 User Fee for Employee Plan Determination Letter Request 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs 8955-SSA Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits These qualified retirement plans set up by self-employed individuals are sometimes called Keogh or H. Https taxes hrblock com R. Https taxes hrblock com 10 plans. Https taxes hrblock com A sole proprietor or a partnership can set up one of these plans. Https taxes hrblock com A common-law employee or a partner cannot set up one of these plans. Https taxes hrblock com The plans described here can also be set up and maintained by employers that are corporations. Https taxes hrblock com All the rules discussed here apply to corporations except where specifically limited to the self-employed. Https taxes hrblock com The plan must be for the exclusive benefit of employees or their beneficiaries. Https taxes hrblock com These qualified plans can include coverage for a self-employed individual. Https taxes hrblock com As an employer, you can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Https taxes hrblock com The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Https taxes hrblock com Kinds of Plans There are two basic kinds of qualified plans—defined contribution plans and defined benefit plans—and different rules apply to each. Https taxes hrblock com You can have more than one qualified plan, but your contributions to all the plans must not total more than the overall limits discussed under Contributions and Employer Deduction, later. Https taxes hrblock com Defined Contribution Plan A defined contribution plan provides an individual account for each participant in the plan. Https taxes hrblock com It provides benefits to a participant largely based on the amount contributed to that participant's account. Https taxes hrblock com Benefits are also affected by any income, expenses, gains, losses, and forfeitures of other accounts that may be allocated to an account. Https taxes hrblock com A defined contribution plan can be either a profit-sharing plan or a money purchase pension plan. Https taxes hrblock com Profit-sharing plan. Https taxes hrblock com   Although it is called a “profit-sharing plan,” you do not actually have to make a business profit for the year in order to make a contribution (except for yourself if you are self-employed as discussed under Self-employed Individual, later). Https taxes hrblock com A profit-sharing plan can be set up to allow for discretionary employer contributions, meaning the amount contributed each year to the plan is not fixed. Https taxes hrblock com An employer may even make no contribution to the plan for a given year. Https taxes hrblock com   The plan must provide a definite formula for allocating the contribution among the participants and for distributing the accumulated funds to the employees after they reach a certain age, after a fixed number of years, or upon certain other occurrences. Https taxes hrblock com   In general, you can be more flexible in making contributions to a profit-sharing plan than to a money purchase pension plan (discussed next) or a defined benefit plan (discussed later). Https taxes hrblock com Money purchase pension plan. Https taxes hrblock com   Contributions to a money purchase pension plan are fixed and are not based on your business profits. Https taxes hrblock com For example, if the plan requires that contributions be 10% of the participants' compensation without regard to whether you have profits (or the self-employed person has earned income), the plan is a money purchase pension plan. Https taxes hrblock com This applies even though the compensation of a self-employed individual as a participant is based on earned income derived from business profits. Https taxes hrblock com Defined Benefit Plan A defined benefit plan is any plan that is not a defined contribution plan. Https taxes hrblock com Contributions to a defined benefit plan are based on what is needed to provide definitely determinable benefits to plan participants. Https taxes hrblock com Actuarial assumptions and computations are required to figure these contributions. Https taxes hrblock com Generally, you will need continuing professional help to have a defined benefit plan. Https taxes hrblock com Qualification Rules To qualify for the tax benefits available to qualified plans, a plan must meet certain requirements (qualification rules) of the tax law. Https taxes hrblock com Generally, unless you write your own plan, the financial institution that provided your plan will take the continuing responsibility for meeting qualification rules that are later changed. Https taxes hrblock com The following is a brief overview of important qualification rules that generally have not yet been discussed. Https taxes hrblock com It is not intended to be all-inclusive. Https taxes hrblock com See Setting Up a Qualified Plan , later. Https taxes hrblock com Generally, the following qualification rules also apply to a SIMPLE 401(k) retirement plan. Https taxes hrblock com A SIMPLE 401(k) plan is, however, not subject to the top-heavy plan rules and nondiscrimination rules if the plan satisfies the provisions discussed in chapter 3 under SIMPLE 401(k) Plan. Https taxes hrblock com Plan assets must not be diverted. Https taxes hrblock com   Your plan must make it impossible for its assets to be used for, or diverted to, purposes other than the benefit of employees and their beneficiaries. Https taxes hrblock com As a general rule, the assets cannot be diverted to the employer. Https taxes hrblock com Minimum coverage requirement must be met. Https taxes hrblock com   To be a qualified plan, a defined benefit plan must benefit at least the lesser of the following. Https taxes hrblock com 50 employees, or The greater of: 40% of all employees, or Two employees. Https taxes hrblock com If there is only one employee, the plan must benefit that employee. Https taxes hrblock com Contributions or benefits must not discriminate. Https taxes hrblock com   Under the plan, contributions or benefits to be provided must not discriminate in favor of highly compensated employees. Https taxes hrblock com Contributions and benefits must not be more than certain limits. Https taxes hrblock com   Your plan must not provide for contributions or benefits that are more than certain limits. Https taxes hrblock com The limits apply to the annual contributions and other additions to the account of a participant in a defined contribution plan and to the annual benefit payable to a participant in a defined benefit plan. Https taxes hrblock com These limits are discussed later in this chapter under Contributions. Https taxes hrblock com Minimum vesting standard must be met. Https taxes hrblock com   Your plan must satisfy certain requirements regarding when benefits vest. Https taxes hrblock com A benefit is vested (you have a fixed right to it) when it becomes nonforfeitable. Https taxes hrblock com A benefit is nonforfeitable if it cannot be lost upon the happening, or failure to happen, of any event. Https taxes hrblock com Special rules apply to forfeited benefit amounts. Https taxes hrblock com In defined contribution plans, forfeitures can be allocated to the accounts of remaining participants in a nondiscriminatory way, or they can be used to reduce your contributions. Https taxes hrblock com   Forfeitures under a defined benefit plan cannot be used to increase the benefits any employee would otherwise receive under the plan. Https taxes hrblock com Forfeitures must be used instead to reduce employer contributions. Https taxes hrblock com Participation. Https taxes hrblock com   In general, an employee must be allowed to participate in your plan if he or she meets both the following requirements. Https taxes hrblock com Has reached age 21. Https taxes hrblock com Has at least 1 year of service (2 years if the plan is not a 401(k) plan and provides that after not more than 2 years of service the employee has a nonforfeitable right to all his or her accrued benefit). Https taxes hrblock com A plan cannot exclude an employee because he or she has reached a specified age. Https taxes hrblock com Leased employee. Https taxes hrblock com   A leased employee, defined in chapter 1, who performs services for you (recipient of the services) is treated as your employee for certain plan qualification rules. Https taxes hrblock com These rules include those in all the following areas. Https taxes hrblock com Nondiscrimination in coverage, contributions, and benefits. Https taxes hrblock com Minimum age and service requirements. Https taxes hrblock com Vesting. Https taxes hrblock com Limits on contributions and benefits. Https taxes hrblock com Top-heavy plan requirements. Https taxes hrblock com Contributions or benefits provided by the leasing organization for services performed for you are treated as provided by you. Https taxes hrblock com Benefit payment must begin when required. Https taxes hrblock com   Your plan must provide that, unless the participant chooses otherwise, the payment of benefits to the participant must begin within 60 days after the close of the latest of the following periods. Https taxes hrblock com The plan year in which the participant reaches the earlier of age 65 or the normal retirement age specified in the plan. Https taxes hrblock com The plan year in which the 10th anniversary of the year in which the participant began participating in the plan occurs. Https taxes hrblock com The plan year in which the participant separates from service. Https taxes hrblock com Early retirement. Https taxes hrblock com   Your plan can provide for payment of retirement benefits before the normal retirement age. Https taxes hrblock com If your plan offers an early retirement benefit, a participant who separates from service before satisfying the early retirement age requirement is entitled to that benefit if he or she meets both the following requirements. Https taxes hrblock com Satisfies the service requirement for the early retirement benefit. Https taxes hrblock com Separates from service with a nonforfeitable right to an accrued benefit. Https taxes hrblock com The benefit, which may be actuarially reduced, is payable when the early retirement age requirement is met. Https taxes hrblock com Required minimum distributions. Https taxes hrblock com   Special rules require minimum annual distributions from qualified plans, generally beginning after age  70½. Https taxes hrblock com See Required Distributions , under Distributions, later. Https taxes hrblock com Survivor benefits. Https taxes hrblock com   Defined benefit and money purchase pension plans must provide automatic survivor benefits in both the following forms. Https taxes hrblock com A qualified joint and survivor annuity for a vested participant who does not die before the annuity starting date. Https taxes hrblock com A qualified pre-retirement survivor annuity for a vested participant who dies before the annuity starting date and who has a surviving spouse. Https taxes hrblock com   The automatic survivor benefit also applies to any participant under a profit-sharing plan unless all the following conditions are met. Https taxes hrblock com The participant does not choose benefits in the form of a life annuity. Https taxes hrblock com The plan pays the full vested account balance to the participant's surviving spouse (or other beneficiary if the surviving spouse consents or if there is no surviving spouse) if the participant dies. Https taxes hrblock com The plan is not a direct or indirect transferee of a plan that must provide automatic survivor benefits. Https taxes hrblock com Loan secured by benefits. Https taxes hrblock com   If automatic survivor benefits are required for a spouse under a plan, he or she must consent to a loan that uses as security the accrued benefits in the plan. Https taxes hrblock com Waiver of survivor benefits. Https taxes hrblock com   Each plan participant may be permitted to waive the joint and survivor annuity or the pre-retirement survivor annuity (or both), but only if the participant has the written consent of the spouse. Https taxes hrblock com The plan also must allow the participant to withdraw the waiver. Https taxes hrblock com The spouse's consent must be witnessed by a plan representative or notary public. Https taxes hrblock com Waiver of 30-day waiting period before annuity starting date. Https taxes hrblock com    A plan may permit a participant to waive (with spousal consent) the 30-day minimum waiting period after a written explanation of the terms and conditions of a joint and survivor annuity is provided to each participant. Https taxes hrblock com   The waiver is allowed only if the distribution begins more than 7 days after the written explanation is provided. Https taxes hrblock com Involuntary cash-out of benefits not more than dollar limit. Https taxes hrblock com   A plan may provide for the immediate distribution of the participant's benefit under the plan if the present value of the benefit is not greater than $5,000. Https taxes hrblock com   However, the distribution cannot be made after the annuity starting date unless the participant and the spouse or surviving spouse of a participant who died (if automatic survivor benefits are required for a spouse under the plan) consents in writing to the distribution. Https taxes hrblock com If the present value is greater than $5,000, the plan must have the written consent of the participant and the spouse or surviving spouse (if automatic survivor benefits are required for a spouse under the plan) for any immediate distribution of the benefit. Https taxes hrblock com   Benefits attributable to rollover contributions and earnings on them can be ignored in determining the present value of these benefits. Https taxes hrblock com   A plan must provide for the automatic rollover of any cash-out distribution of more than $1,000 to an individual retirement account or annuity, unless the participant chooses otherwise. Https taxes hrblock com A section 402(f) notice must be sent prior to an involuntary cash-out of an eligible rollover distribution. Https taxes hrblock com See Section 402(f) Notice under Distributions, later, for more details. Https taxes hrblock com Consolidation, merger, or transfer of assets or liabilities. Https taxes hrblock com   Your plan must provide that, in the case of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each participant would (if the plan then terminated) receive a benefit equal to or more than the benefit he or she would have been entitled to just before the merger, etc. Https taxes hrblock com (if the plan had then terminated). Https taxes hrblock com Benefits must not be assigned or alienated. Https taxes hrblock com   Your plan must provide that a participant's or beneficiary's benefits under the plan cannot be taken away by any legal or equitable proceeding except as provided below or pursuant to certain judgements or settlements against the participant for violations of plan rules. Https taxes hrblock com Exception for certain loans. Https taxes hrblock com   A loan from the plan (not from a third party) to a participant or beneficiary is not treated as an assignment or alienation if the loan is secured by the participant's accrued nonforfeitable benefit and is exempt from the tax on prohibited transactions under section 4975(d)(1) or would be exempt if the participant were a disqualified person. Https taxes hrblock com A disqualified person is defined later in this chapter under Prohibited Transactions. Https taxes hrblock com Exception for QDRO. Https taxes hrblock com   Compliance with a QDRO (qualified domestic relations order) does not result in a prohibited assignment or alienation of benefits. Https taxes hrblock com   Payments to an alternate payee under a QDRO before the participant attains age 59½ are not subject to the 10% additional tax that would otherwise apply under certain circumstances. Https taxes hrblock com Benefits distributed to an alternate payee under a QDRO can be rolled over tax free to an individual retirement account or to an individual retirement annuity. Https taxes hrblock com No benefit reduction for social security increases. Https taxes hrblock com   Your plan must not permit a benefit reduction for a post-separation increase in the social security benefit level or wage base for any participant or beneficiary who is receiving benefits under your plan, or who is separated from service and has nonforfeitable rights to benefits. Https taxes hrblock com This rule also applies to plans supplementing the benefits provided by other federal or state laws. Https taxes hrblock com Elective deferrals must be limited. Https taxes hrblock com   If your plan provides for elective deferrals, it must limit those deferrals to the amount in effect for that particular year. Https taxes hrblock com See Limit on Elective Deferrals later in this chapter. Https taxes hrblock com Top-heavy plan requirements. Https taxes hrblock com   A top-heavy plan is one that mainly favors partners, sole proprietors, and other key employees. Https taxes hrblock com   A plan is top-heavy for a plan year if, for the preceding plan year, the total value of accrued benefits or account balances of key employees is more than 60% of the total value of accrued benefits or account balances of all employees. Https taxes hrblock com Additional requirements apply to a top-heavy plan primarily to provide minimum benefits or contributions for non-key employees covered by the plan. Https taxes hrblock com   Most qualified plans, whether or not top-heavy, must contain provisions that meet the top-heavy requirements and will take effect in plan years in which the plans are top-heavy. Https taxes hrblock com These qualification requirements for top-heavy plans are explained in section 416 and its regulations. Https taxes hrblock com SIMPLE and safe harbor 401(k) plan exception. Https taxes hrblock com   The top-heavy plan requirements do not apply to SIMPLE 401(k) plans, discussed earlier in chapter 3, or to safe harbor 401(k) plans that consist solely of safe harbor contributions, discussed later in this chapter. Https taxes hrblock com QACAs (discussed later) also are not subject to top-heavy requirements. Https taxes hrblock com Setting Up a Qualified Plan There are two basic steps in setting up a qualified plan. Https taxes hrblock com First you adopt a written plan. Https taxes hrblock com Then you invest the plan assets. Https taxes hrblock com You, the employer, are responsible for setting up and maintaining the plan. Https taxes hrblock com If you are self-employed, it is not necessary to have employees besides yourself to sponsor and set up a qualified plan. Https taxes hrblock com If you have employees, see Participation, under Qualification Rules, earlier. Https taxes hrblock com Set-up deadline. Https taxes hrblock com   To take a deduction for contributions for a tax year, your plan must be set up (adopted) by the last day of that year (December 31 for calendar-year employers). Https taxes hrblock com Credit for startup costs. Https taxes hrblock com   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a qualified plan that first became effective in 2013. Https taxes hrblock com For more information, see Credit for startup costs under Reminders, earlier. Https taxes hrblock com Adopting a Written Plan You must adopt a written plan. Https taxes hrblock com The plan can be an IRS-approved master or prototype plan offered by a sponsoring organization. Https taxes hrblock com Or it can be an individually designed plan. Https taxes hrblock com Written plan requirement. Https taxes hrblock com   To qualify, the plan you set up must be in writing and must be communicated to your employees. Https taxes hrblock com The plan's provisions must be stated in the plan. Https taxes hrblock com It is not sufficient for the plan to merely refer to a requirement of the Internal Revenue Code. Https taxes hrblock com Master or prototype plans. Https taxes hrblock com   Most qualified plans follow a standard form of plan (a master or prototype plan) approved by the IRS. Https taxes hrblock com Master and prototype plans are plans made available by plan providers for adoption by employers (including self-employed individuals). Https taxes hrblock com Under a master plan, a single trust or custodial account is established, as part of the plan, for the joint use of all adopting employers. Https taxes hrblock com Under a prototype plan, a separate trust or custodial account is established for each employer. Https taxes hrblock com Plan providers. Https taxes hrblock com   The following organizations generally can provide IRS-approved master or prototype plans. Https taxes hrblock com Banks (including some savings and loan associations and federally insured credit unions). Https taxes hrblock com Trade or professional organizations. Https taxes hrblock com Insurance companies. Https taxes hrblock com Mutual funds. Https taxes hrblock com Individually designed plan. Https taxes hrblock com   If you prefer, you can set up an individually designed plan to meet specific needs. Https taxes hrblock com Although advance IRS approval is not required, you can apply for approval by paying a fee and requesting a determination letter. Https taxes hrblock com You may need professional help for this. Https taxes hrblock com See Rev. Https taxes hrblock com Proc. Https taxes hrblock com 2014-6, 2014-1 I. Https taxes hrblock com R. Https taxes hrblock com B. Https taxes hrblock com 198, available at www. Https taxes hrblock com irs. Https taxes hrblock com gov/irb/2014-1_IRB/ar10. Https taxes hrblock com html, as annually updated, that may help you decide whether to apply for approval. Https taxes hrblock com Internal Revenue Bulletins are available on the IRS website at IRS. Https taxes hrblock com gov They are also available at most IRS offices and at certain libraries. Https taxes hrblock com User fee. Https taxes hrblock com   The fee mentioned earlier for requesting a determination letter does not apply to employers who have 100 or fewer employees who received at least $5,000 of compensation from the employer for the preceding year. Https taxes hrblock com At least one of them must be a non-highly compensated employee participating in the plan. Https taxes hrblock com The fee does not apply to requests made by the later of the following dates. Https taxes hrblock com The end of the 5th plan year the plan is in effect. Https taxes hrblock com The end of any remedial amendment period for the plan that begins within the first 5 plan years. Https taxes hrblock com The request cannot be made by the sponsor of a prototype or similar plan the sponsor intends to market to participating employers. Https taxes hrblock com   For more information about whether the user fee applies, see Rev. Https taxes hrblock com Proc. Https taxes hrblock com 2014-8, 2014-1 I. Https taxes hrblock com R. Https taxes hrblock com B. Https taxes hrblock com 242, available at www. Https taxes hrblock com irs. Https taxes hrblock com gov/irb/2014-1_IRB/ar12. Https taxes hrblock com html, as may be annually updated; Notice 2003-49, 2003-32 I. Https taxes hrblock com R. Https taxes hrblock com B. Https taxes hrblock com 294, available at www. Https taxes hrblock com irs. Https taxes hrblock com gov/irb/2003-32_IRB/ar13. Https taxes hrblock com html; and Notice 2011-86, 2011-45 I. Https taxes hrblock com R. Https taxes hrblock com B. Https taxes hrblock com 698, available at www. Https taxes hrblock com irs. Https taxes hrblock com gov/irb/2011-45_IRB/ar11. Https taxes hrblock com html. Https taxes hrblock com Investing Plan Assets In setting up a qualified plan, you arrange how the plan's funds will be used to build its assets. Https taxes hrblock com You can establish a trust or custodial account to invest the funds. Https taxes hrblock com You, the trust, or the custodial account can buy an annuity contract from an insurance company. Https taxes hrblock com Life insurance can be included only if it is incidental to the retirement benefits. Https taxes hrblock com You set up a trust by a legal instrument (written document). Https taxes hrblock com You may need professional help to do this. Https taxes hrblock com You can set up a custodial account with a bank, savings and loan association, credit union, or other person who can act as the plan trustee. Https taxes hrblock com You do not need a trust or custodial account, although you can have one, to invest the plan's funds in annuity contracts or face-amount certificates. Https taxes hrblock com If anyone other than a trustee holds them, however, the contracts or certificates must state they are not transferable. Https taxes hrblock com Other plan requirements. Https taxes hrblock com   For information on other important plan requirements, see Qualification Rules , earlier in this chapter. Https taxes hrblock com Minimum Funding Requirement In general, if your plan is a money purchase pension plan or a defined benefit plan, you must actually pay enough into the plan to satisfy the minimum funding standard for each year. Https taxes hrblock com Determining the amount needed to satisfy the minimum funding standard for a defined benefit plan is complicated, and you should seek professional help in order to meet these contribution requirements. Https taxes hrblock com For information on this funding requirement, see section 412 and its regulations. Https taxes hrblock com Quarterly installments of required contributions. Https taxes hrblock com   If your plan is a defined benefit plan subject to the minimum funding requirements, you generally must make quarterly installment payments of the required contributions. Https taxes hrblock com If you do not pay the full installments timely, you may have to pay interest on any underpayment for the period of the underpayment. Https taxes hrblock com Due dates. Https taxes hrblock com   The due dates for the installments are 15 days after the end of each quarter. Https taxes hrblock com For a calendar-year plan, the installments are due April 15, July 15, October 15, and January 15 (of the following year). Https taxes hrblock com Installment percentage. Https taxes hrblock com   Each quarterly installment must be 25% of the required annual payment. Https taxes hrblock com Extended period for making contributions. Https taxes hrblock com   Additional contributions required to satisfy the minimum funding requirement for a plan year will be considered timely if made by 8½ months after the end of that year. Https taxes hrblock com Contributions A qualified plan is generally funded by your contributions. Https taxes hrblock com However, employees participating in the plan may be permitted to make contributions, and you may be permitted to make contributions on your own behalf. Https taxes hrblock com See Employee Contributions and Elective Deferrals later. Https taxes hrblock com Contributions deadline. Https taxes hrblock com   You can make deductible contributions for a tax year up to the due date of your return (plus extensions) for that year. Https taxes hrblock com Self-employed individual. Https taxes hrblock com   You can make contributions on behalf of yourself only if you have net earnings (compensation) from self-employment in the trade or business for which the plan was set up. Https taxes hrblock com Your net earnings must be from your personal services, not from your investments. Https taxes hrblock com If you have a net loss from self-employment, you cannot make contributions for yourself for the year, even if you can contribute for common-law employees based on their compensation. Https taxes hrblock com Employer Contributions There are certain limits on the contributions and other annual additions you can make each year for plan participants. Https taxes hrblock com There are also limits on the amount you can deduct. Https taxes hrblock com See Deduction Limits , later. Https taxes hrblock com Limits on Contributions and Benefits Your plan must provide that contributions or benefits cannot exceed certain limits. Https taxes hrblock com The limits differ depending on whether your plan is a defined contribution plan or a defined benefit plan. Https taxes hrblock com Defined benefit plan. Https taxes hrblock com   For 2013, the annual benefit for a participant under a defined benefit plan cannot exceed the lesser of the following amounts. Https taxes hrblock com 100% of the participant's average compensation for his or her highest 3 consecutive calendar years. Https taxes hrblock com $205,000 ($210,000 for 2014). Https taxes hrblock com Defined contribution plan. Https taxes hrblock com   For 2013, a defined contribution plan's annual contributions and other additions (excluding earnings) to the account of a participant cannot exceed the lesser of the following amounts. Https taxes hrblock com 100% of the participant's compensation. Https taxes hrblock com $51,000 ($52,000 for 2014). Https taxes hrblock com   Catch-up contributions (discussed later under Limit on Elective Deferrals) are not subject to the above limit. Https taxes hrblock com Employee Contributions Participants may be permitted to make nondeductible contributions to a plan in addition to your contributions. Https taxes hrblock com Even though these employee contributions are not deductible, the earnings on them are tax free until distributed in later years. Https taxes hrblock com Also, these contributions must satisfy the actual contribution percentage (ACP) test of section 401(m)(2), a nondiscrimination test that applies to employee contributions and matching contributions. Https taxes hrblock com See Regulations sections 1. Https taxes hrblock com 401(k)-2 and 1. Https taxes hrblock com 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Https taxes hrblock com When Contributions Are Considered Made You generally apply your plan contributions to the year in which you make them. Https taxes hrblock com But you can apply them to the previous year if all the following requirements are met. Https taxes hrblock com You make them by the due date of your tax return for the previous year (plus extensions). Https taxes hrblock com The plan was established by the end of the previous year. Https taxes hrblock com The plan treats the contributions as though it had received them on the last day of the previous year. Https taxes hrblock com You do either of the following. Https taxes hrblock com You specify in writing to the plan administrator or trustee that the contributions apply to the previous year. Https taxes hrblock com You deduct the contributions on your tax return for the previous year. Https taxes hrblock com A partnership shows contributions for partners on Form 1065. Https taxes hrblock com Employer's promissory note. Https taxes hrblock com   Your promissory note made out to the plan is not a payment that qualifies for the deduction. Https taxes hrblock com Also, issuing this note is a prohibited transaction subject to tax. Https taxes hrblock com See Prohibited Transactions , later. Https taxes hrblock com Employer Deduction You can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Https taxes hrblock com The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Https taxes hrblock com Deduction Limits The deduction limit for your contributions to a qualified plan depends on the kind of plan you have. Https taxes hrblock com Defined contribution plans. Https taxes hrblock com   The deduction for contributions to a defined contribution plan (profit-sharing plan or money purchase pension plan) cannot be more than 25% of the compensation paid (or accrued) during the year to your eligible employees participating in the plan. Https taxes hrblock com If you are self-employed, you must reduce this limit in figuring the deduction for contributions you make for your own account. Https taxes hrblock com See Deduction Limit for Self-Employed Individuals , later. Https taxes hrblock com   When figuring the deduction limit, the following rules apply. Https taxes hrblock com Elective deferrals (discussed later) are not subject to the limit. Https taxes hrblock com Compensation includes elective deferrals. Https taxes hrblock com The maximum compensation that can be taken into account for each employee in 2013 is $255,000 ($260,000 for 2014). Https taxes hrblock com Defined benefit plans. Https taxes hrblock com   The deduction for contributions to a defined benefit plan is based on actuarial assumptions and computations. Https taxes hrblock com Consequently, an actuary must figure your deduction limit. Https taxes hrblock com    In figuring the deduction for contributions, you cannot take into account any contributions or benefits that are more than the limits discussed earlier under Limits on Contributions and Benefits, earlier. Https taxes hrblock com Table 4–1. Https taxes hrblock com Carryover of Excess Contributions Illustrated—Profit-Sharing Plan (000's omitted) Year Participants' compensation Participants' share of required contribution (10% of annual profit) Deductible  limit for current year (25% of compensation) Contribution Excess contribution carryover used1 Total  deduction including carryovers Excess contribution carryover available at end of year 2010 $1,000 $100 $250 $100 $ 0 $100 $ 0 2011 400 165 100 165 0 100 65 2012 500 100 125 100 25 125 40 2013 600 100 150 100 40 140 0  1There were no carryovers from years before 2010. Https taxes hrblock com Deduction Limit for Self-Employed Individuals If you make contributions for yourself, you need to make a special computation to figure your maximum deduction for these contributions. Https taxes hrblock com Compensation is your net earnings from self-employment, defined in chapter 1. Https taxes hrblock com This definition takes into account both the following items. Https taxes hrblock com The deduction for the deductible part of your self-employment tax. Https taxes hrblock com The deduction for contributions on your behalf to the plan. Https taxes hrblock com The deduction for your own contributions and your net earnings depend on each other. Https taxes hrblock com For this reason, you determine the deduction for your own contributions indirectly by reducing the contribution rate called for in your plan. Https taxes hrblock com To do this, use either the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed in chapter 5. Https taxes hrblock com Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Https taxes hrblock com Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Https taxes hrblock com For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040); partnerships deduct them on Form 1065; and corporations deduct them on Form 1120, or Form 1120S. Https taxes hrblock com Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Https taxes hrblock com (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you get from the partnership. Https taxes hrblock com ) Carryover of Excess Contributions If you contribute more to the plans than you can deduct for the year, you can carry over and deduct the difference in later years, combined with your contributions for those years. Https taxes hrblock com Your combined deduction in a later year is limited to 25% of the participating employees' compensation for that year. Https taxes hrblock com For purposes of this limit, a SEP is treated as a profit-sharing (defined contribution) plan. Https taxes hrblock com However, this percentage limit must be reduced to figure your maximum deduction for contributions you make for yourself. Https taxes hrblock com See Deduction Limit for Self-Employed Individuals, earlier. Https taxes hrblock com The amount you carry over and deduct may be subject to the excise tax discussed next. Https taxes hrblock com Table 4-1, earlier, illustrates the carryover of excess contributions to a profit-sharing plan. Https taxes hrblock com Excise Tax for Nondeductible (Excess) Contributions If you contribute more than your deduction limit to a retirement plan, you have made nondeductible contributions and you may be liable for an excise tax. Https taxes hrblock com In general, a 10% excise tax applies to nondeductible contributions made to qualified pension and profit-sharing plans and to SEPs. Https taxes hrblock com Special rule for self-employed individuals. Https taxes hrblock com   The 10% excise tax does not apply to any contribution made to meet the minimum funding requirements in a money purchase pension plan or a defined benefit plan. Https taxes hrblock com Even if that contribution is more than your earned income from the trade or business for which the plan is set up, the difference is not subject to this excise tax. Https taxes hrblock com See Minimum Funding Requirement , earlier. Https taxes hrblock com Reporting the tax. Https taxes hrblock com   You must report the tax on your nondeductible contributions on Form 5330. Https taxes hrblock com Form 5330 includes a computation of the tax. Https taxes hrblock com See the separate instructions for completing the form. Https taxes hrblock com Elective Deferrals (401(k) Plans) Your qualified plan can include a cash or deferred arrangement under which participants can choose to have you contribute part of their before-tax compensation to the plan rather than receive the compensation in cash. Https taxes hrblock com A plan with this type of arrangement is popularly known as a “401(k) plan. Https taxes hrblock com ” (As a self-employed individual participating in the plan, you can contribute part of your before-tax net earnings from the business. Https taxes hrblock com ) This contribution is called an “elective deferral” because participants choose (elect) to defer receipt of the money. Https taxes hrblock com In general, a qualified plan can include a cash or deferred arrangement only if the qualified plan is one of the following plans. Https taxes hrblock com A profit-sharing plan. Https taxes hrblock com A money purchase pension plan in existence on June 27, 1974, that included a salary reduction arrangement on that date. Https taxes hrblock com Partnership. Https taxes hrblock com   A partnership can have a 401(k) plan. Https taxes hrblock com Restriction on conditions of participation. Https taxes hrblock com   The plan cannot require, as a condition of participation, that an employee complete more than 1 year of service. Https taxes hrblock com Matching contributions. Https taxes hrblock com   If your plan permits, you can make matching contributions for an employee who makes an elective deferral to your 401(k) plan. Https taxes hrblock com For example, the plan might provide that you will contribute 50 cents for each dollar your participating employees choose to defer under your 401(k) plan. Https taxes hrblock com Matching contributions are generally subject to the ACP test discussed earlier under Employee Contributions. Https taxes hrblock com Nonelective contributions. Https taxes hrblock com   You can also make contributions (other than matching contributions) for your participating employees without giving them the choice to take cash instead. Https taxes hrblock com These are called nonelective contributions. Https taxes hrblock com Employee compensation limit. Https taxes hrblock com   No more than $255,000 of the employee's compensation can be taken into account when figuring contributions other than elective deferrals in 2013. Https taxes hrblock com This limit is $260,000 in 2014. Https taxes hrblock com SIMPLE 401(k) plan. Https taxes hrblock com   If you had 100 or fewer employees who earned $5,000 or more in compensation during the preceding year, you may be able to set up a SIMPLE 401(k) plan. Https taxes hrblock com A SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy plan requirements discussed earlier under Qualification Rules. Https taxes hrblock com For details about SIMPLE 401(k) plans, see SIMPLE 401(k) Plan in chapter 3. Https taxes hrblock com Distributions. Https taxes hrblock com   Certain rules apply to distributions from 401(k) plans. Https taxes hrblock com See Distributions From 401(k) Plans , later. Https taxes hrblock com Limit on Elective Deferrals There is a limit on the amount an employee can defer each year under these plans. Https taxes hrblock com This limit applies without regard to community property laws. Https taxes hrblock com Your plan must provide that your employees cannot defer more than the limit that applies for a particular year. Https taxes hrblock com For 2013 and 2014, the basic limit on elective deferrals is $17,500. Https taxes hrblock com This limit applies to all salary reduction contributions and elective deferrals. Https taxes hrblock com If, in conjunction with other plans, the deferral limit is exceeded, the difference is included in the employee's gross income. Https taxes hrblock com Catch-up contributions. Https taxes hrblock com   A 401(k) plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Https taxes hrblock com The catch-up contribution limit for 2013 and 2014 is $5,500. Https taxes hrblock com Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the $17,500 limit, the actual deferral percentage (ADP) test limit of section 401(k)(3), or the plan limit (if any). Https taxes hrblock com However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Https taxes hrblock com The catch-up contribution limit. Https taxes hrblock com The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Https taxes hrblock com Treatment of contributions. Https taxes hrblock com   Your contributions to your own 401(k) plan are generally deductible by you for the year they are contributed to the plan. Https taxes hrblock com Matching or nonelective contributions made to the plan are also deductible by you in the year of contribution. Https taxes hrblock com Your employees' elective deferrals other than designated Roth contributions are tax free until distributed from the plan. Https taxes hrblock com Elective deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Https taxes hrblock com Forfeiture. Https taxes hrblock com   Employees have a nonforfeitable right at all times to their accrued benefit attributable to elective deferrals. Https taxes hrblock com Reporting on Form W-2. Https taxes hrblock com   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Https taxes hrblock com You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Https taxes hrblock com You must also include them in box 12. Https taxes hrblock com Mark the “Retirement plan” checkbox in box 13. Https taxes hrblock com For more information, see the Form W-2 instructions. Https taxes hrblock com Automatic Enrollment Your 401(k) plan can have an automatic enrollment feature. Https taxes hrblock com Under this feature, you can automatically reduce an employee's pay by a fixed percentage and contribute that amount to the 401(k) plan on his or her behalf unless the employee affirmatively chooses not to have his or her pay reduced or chooses to have it reduced by a different percentage. Https taxes hrblock com These contributions are elective deferrals. Https taxes hrblock com An automatic enrollment feature will encourage employees' saving for retirement and will help your plan pass nondiscrimination testing (if applicable). Https taxes hrblock com For more information, see Publication 4674, Automatic Enrollment 401(k) Plans for Small Businesses. Https taxes hrblock com Eligible automatic contribution arrangement. Https taxes hrblock com   Under an eligible automatic contribution arrangement (EACA), a participant is treated as having elected to have the employer make contributions in an amount equal to a uniform percentage of compensation. Https taxes hrblock com This automatic election will remain in place until the participant specifically elects not to have such deferral percentage made (or elects a different percentage). Https taxes hrblock com There is no required deferral percentage. Https taxes hrblock com Withdrawals. Https taxes hrblock com   Under an EACA, you may allow participants to withdraw their automatic contributions to the plan if certain conditions are met. Https taxes hrblock com The participant must elect the withdrawal no later than 90 days after the date of the first elective contributions under the EACA. Https taxes hrblock com The participant must withdraw the entire amount of EACA default contributions, including any earnings thereon. Https taxes hrblock com   If the plan allows withdrawals under the EACA, the amount of the withdrawal other than the amount of any designated Roth contributions must be included in the employee's gross income for the tax year in which the distribution is made. Https taxes hrblock com The additional 10% tax on early distributions will not apply to the distribution. Https taxes hrblock com Notice requirement. Https taxes hrblock com   Under an EACA, employees must be given written notice of the terms of the EACA within a reasonable period of time before each plan year. Https taxes hrblock com The notice must be written in a manner calculated to be understood by the average employee and be sufficiently accurate and comprehensive in order to apprise the employee of his or her rights and obligations under the EACA. Https taxes hrblock com The notice must include an explanation of the employee's right to elect not to have elective contributions made on his or her behalf, or to elect a different percentage, and the employee must be given a reasonable period of time after receipt of the notice before the first elective contribution is made. Https taxes hrblock com The notice also must explain how contributions will be invested in the absence of an investment election by the employee. Https taxes hrblock com Qualified automatic contribution arrangement. Https taxes hrblock com    A qualified automatic contribution arrangement (QACA) is a type of safe harbor plan. Https taxes hrblock com It contains an automatic enrollment feature, and mandatory employer contributions are required. Https taxes hrblock com If your plan includes a QACA, it will not be subject to the ADP test (discussed later) nor the top-heavy requirements (discussed earlier). Https taxes hrblock com Additionally, your plan will not be subject to the actual contribution percentage (ACP) test if certain additional requirements are met. Https taxes hrblock com Under a QACA, each employee who is eligible to participate in the plan will be treated as having elected to make elective deferral contributions equal to a certain default percentage of compensation. Https taxes hrblock com In order to not have default elective deferrals made, an employee must make an affirmative election specifying a deferral percentage (including zero, if desired). Https taxes hrblock com If an employee does not make an affirmative election, the default deferral percentage must meet the following conditions. Https taxes hrblock com It must be applied uniformly. Https taxes hrblock com It must not exceed 10%. Https taxes hrblock com It must be at least 3% in the first plan year it applies to an employee and through the end of the following year. Https taxes hrblock com It must increase to at least 4% in the following plan year. Https taxes hrblock com It must increase to at least 5% in the following plan year. Https taxes hrblock com It must increase to at least 6% in subsequent plan years. Https taxes hrblock com Matching or nonelective contributions. Https taxes hrblock com   Under the terms of the QACA, you must make either matching or nonelective contributions according to the following terms. Https taxes hrblock com Matching contributions. Https taxes hrblock com You must make matching contributions on behalf of each non-highly compensated employee in the following amounts. Https taxes hrblock com An amount equal to 100% of elective deferrals, up to 1% of compensation. Https taxes hrblock com An amount equal to 50% of elective deferrals, from 1% up to 6% of compensation. Https taxes hrblock com Other formulas may be used as long as they are at least as favorable to non-highly compensated employees. Https taxes hrblock com The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Https taxes hrblock com Nonelective contributions. Https taxes hrblock com You must make nonelective contributions on behalf of every non-highly compensated employee eligible to participate in the plan, regardless of whether they elected to participate, in an amount equal to at least 3% of their compensation. Https taxes hrblock com Vesting requirements. Https taxes hrblock com   All accrued benefits attributed to matching or nonelective contributions under the QACA must be 100% vested for all employees who complete 2 years of service. Https taxes hrblock com These contributions are subject to special withdrawal restrictions, discussed later. Https taxes hrblock com Notice requirements. Https taxes hrblock com   Each employee eligible to participate in the QACA must receive written notice of their rights and obligations under the QACA, within a reasonable period before each plan year. Https taxes hrblock com The notice must be written in a manner calculated to be understood by the average employee, and it must be accurate and comprehensive. Https taxes hrblock com The notice must explain their right to elect not to have elective contributions made on their behalf, or to have contributions made at a different percentage than the default percentage. Https taxes hrblock com Additionally, the notice must explain how contributions will be invested in the absence of any investment election by the employee. Https taxes hrblock com The employee must have a reasonable period of time after receiving the notice to make such contribution and investment elections prior to the first contributions under the QACA. Https taxes hrblock com Treatment of Excess Deferrals If the total of an employee's deferrals is more than the limit for 2013, the employee can have the difference (called an excess deferral) paid out of any of the plans that permit these distributions. Https taxes hrblock com He or she must notify the plan by April 15, 2014 (or an earlier date specified in the plan), of the amount to be paid from each plan. Https taxes hrblock com The plan must then pay the employee that amount, plus earnings on the amount through the end of 2013, by April 15, 2014. Https taxes hrblock com Excess withdrawn by April 15. Https taxes hrblock com   If the employee takes out the excess deferral by April 15, 2014, it is not reported again by including it in the employee's gross income for 2014. Https taxes hrblock com However, any income earned in 2013 on the excess deferral taken out is taxable in the tax year in which it is taken out. Https taxes hrblock com The distribution is not subject to the additional 10% tax on early distributions. Https taxes hrblock com   If the employee takes out part of the excess deferral and the income on it, the distribution is treated as made proportionately from the excess deferral and the income. Https taxes hrblock com   Even if the employee takes out the excess deferral by April 15, the amount will be considered for purposes of nondiscrimination testing requirements of the plan, unless the distributed amount is for a non-highly compensated employee who participates in only one employer's 401(k) plan or plans. Https taxes hrblock com Excess not withdrawn by April 15. Https taxes hrblock com   If the employee does not take out the excess deferral by April 15, 2014, the excess, though taxable in 2013, is not included in the employee's cost basis in figuring the taxable amount of any eventual distributions under the plan. Https taxes hrblock com In effect, an excess deferral left in the plan is taxed twice, once when contributed and again when distributed. Https taxes hrblock com Also, if the employee's excess deferral is allowed to stay in the plan and the employee participates in no other employer's plan, the plan can be disqualified. Https taxes hrblock com Reporting corrective distributions on Form 1099-R. Https taxes hrblock com   Report corrective distributions of excess deferrals (including any earnings) on Form 1099-R. Https taxes hrblock com For specific information about reporting corrective distributions, see the Instructions for Forms 1099-R and 5498. Https taxes hrblock com Tax on excess contributions of highly compensated employees. Https taxes hrblock com   The law provides tests to detect discrimination in a plan. Https taxes hrblock com If tests, such as the actual deferral percentage test (ADP test) (see section 401(k)(3)) and the actual contribution percentage test (ACP test) (see section 401(m)(2)), show that contributions for highly compensated employees are more than the test limits for these contributions, the employer may have to pay a 10% excise tax. Https taxes hrblock com Report the tax on Form 5330. Https taxes hrblock com The ADP test does not apply to a safe harbor 401(k) plan (discussed next) nor to a QACA. Https taxes hrblock com Also, the ACP test does not apply to these plans if certain additional requirements are met. Https taxes hrblock com   The tax for the year is 10% of the excess contributions for the plan year ending in your tax year. Https taxes hrblock com Excess contributions are elective deferrals, employee contributions, or employer matching or nonelective contributions that are more than the amount permitted under the ADP test or the ACP test. Https taxes hrblock com   See Regulations sections 1. Https taxes hrblock com 401(k)-2 and 1. Https taxes hrblock com 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Https taxes hrblock com    If the plan fails the ADP or ACP testing, and the failure is not corrected by the end of the next plan year, the plan can be disqualified. Https taxes hrblock com Safe harbor 401(k) plan. Https taxes hrblock com If you meet the requirements for a safe harbor 401(k) plan, you do not have to satisfy the ADP test, nor the ACP test, if certain additional requirements are met. Https taxes hrblock com For your plan to be a safe harbor plan, you must meet the following conditions. Https taxes hrblock com Matching or nonelective contributions. Https taxes hrblock com You must make matching or nonelective contributions according to one of the following formulas. Https taxes hrblock com Matching contributions. Https taxes hrblock com You must make matching contributions according to the following rules. Https taxes hrblock com You must contribute an amount equal to 100% of each non-highly compensated employee's elective deferrals, up to 3% of compensation. Https taxes hrblock com You must contribute an amount equal to 50% of each non-highly compensated employee's elective deferrals, from 3% up to 5% of compensation. Https taxes hrblock com The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Https taxes hrblock com Nonelective contributions. Https taxes hrblock com You must make nonelective contributions, without regard to whether the employee made elective deferrals, on behalf of all non-highly compensated employees eligible to participate in the plan, equal to at least 3% of the employee's compensation. Https taxes hrblock com These mandatory matching and nonelective contributions must be immediately 100% vested and are subject to special withdrawal restrictions. Https taxes hrblock com Notice requirement. Https taxes hrblock com You must give eligible employees written notice of their rights and obligations with regard to contributions under the plan, within a reasonable period before the plan year. Https taxes hrblock com The other requirements for a 401(k) plan, including withdrawal and vesting rules, must also be met for your plan to qualify as a safe harbor 401(k) plan. Https taxes hrblock com Qualified Roth Contribution Program Under this program an eligible employee can designate all or a portion of his or her elective deferrals as after-tax Roth contributions. Https taxes hrblock com Elective deferrals designated as Roth contributions must be maintained in a separate Roth account. Https taxes hrblock com However, unlike other elective deferrals, designated Roth contributions are not excluded from employees' gross income, but qualified distributions from a Roth account are excluded from employees' gross income. Https taxes hrblock com Elective Deferrals Under a qualified Roth contribution program, the amount of elective deferrals that an employee may designate as a Roth contribution is limited to the maximum amount of elective deferrals excludable from gross income for the year (for 2013 and 2014, $17,500 if under age 50 and $23,000 if age 50 or over) less the total amount of the employee's elective deferrals not designated as Roth contributions. Https taxes hrblock com Designated Roth deferrals are treated the same as pre-tax elective deferrals for most purposes, including: The annual individual elective deferral limit (total of all designated Roth contributions and traditional, pre-tax elective deferrals) of $17,500 for 2013 and 2014, with an additional $5,500 if age 50 or over for 2013 and 2014, Determining the maximum employee and employer annual contributions of the lesser of 100% of compensation or $51,000 for 2013 ($52,000 for 2014), Nondiscrimination testing, Required distributions, and Elective deferrals not taken into account for purposes of deduction limits. Https taxes hrblock com Qualified Distributions A qualified distribution is a distribution that is made after the employee's nonexclusion period and: On or after the employee attains age   59½, On account of the employee's being disabled, or On or after the employee's death. Https taxes hrblock com An employee's nonexclusion period for a plan is the 5-tax-year period beginning with the earlier of the following tax years. Https taxes hrblock com The first tax year in which the employee made a contribution to his or her Roth account in the plan, or If a rollover contribution was made to the employee's designated Roth account from a designated Roth account previously established for the employee under another plan, then the first tax year the employee made a designated Roth contribution to the previously established account. Https taxes hrblock com Rollover. Https taxes hrblock com   Beginning September 28, 2010, a rollover from another account can be made to a designated Roth account in the same plan. Https taxes hrblock com For additional information on these in-plan Roth rollovers, see Notice 2010-84, 2010-51 I. Https taxes hrblock com R. Https taxes hrblock com B. Https taxes hrblock com 872, available at www. Https taxes hrblock com irs. Https taxes hrblock com gov/irb/2010-51_IRB/ar11. Https taxes hrblock com html, and Notice 2013-74. Https taxes hrblock com A distribution from a designated Roth account can only be rolled over to another designated Roth account or a Roth IRA. Https taxes hrblock com Rollover amounts do not apply toward the annual deferral limit. Https taxes hrblock com Reporting Requirements You must report a contribution to a Roth account on Form W-2 and a distribution from a Roth account on Form 1099-R. Https taxes hrblock com See the Form W-2 and 1099-R instructions for detailed information. Https taxes hrblock com Distributions Amounts paid to plan participants from a qualified plan are called distributions. Https taxes hrblock com Distributions may be nonperiodic, such as lump-sum distributions, or periodic, such as annuity payments. Https taxes hrblock com Also, certain loans may be treated as distributions. Https taxes hrblock com See Loans Treated as Distributions in Publication 575. Https taxes hrblock com Required Distributions A qualified plan must provide that each participant will either: Receive his or her entire interest (benefits) in the plan by the required beginning date (defined later), or Begin receiving regular periodic distributions by the required beginning date in annual amounts calculated to distribute the participant's entire interest (benefits) over his or her life expectancy or over the joint life expectancy of the participant and the designated beneficiary (or over a shorter period). Https taxes hrblock com These distribution rules apply individually to each qualified plan. Https taxes hrblock com You cannot satisfy the requirement for one plan by taking a distribution from another. Https taxes hrblock com The plan must provide that these rules override any inconsistent distribution options previously offered. Https taxes hrblock com Minimum distribution. Https taxes hrblock com   If the account balance of a qualified plan participant is to be distributed (other than as an annuity), the plan administrator must figure the minimum amount required to be distributed each distribution calendar year. Https taxes hrblock com This minimum is figured by dividing the account balance by the applicable life expectancy. Https taxes hrblock com The plan administrator can use the life expectancy tables in Appendix C of Publication 590 for this purpose. Https taxes hrblock com For more information on figuring the minimum distribution, see Tax on Excess Accumulation in Publication 575. Https taxes hrblock com Required beginning date. Https taxes hrblock com   Generally, each participant must receive his or her entire benefits in the plan or begin to receive periodic distributions of benefits from the plan by the required beginning date. Https taxes hrblock com   A participant must begin to receive distributions from his or her qualified retirement plan by April 1 of the first year after the later of the following years. Https taxes hrblock com Calendar year in which he or she reaches age 70½. Https taxes hrblock com Calendar year in which he or she retires from employment with the employer maintaining the plan. Https taxes hrblock com However, the plan may require the participant to begin receiving distributions by April 1 of the year after the participant reaches age 70½ even if the participant has not retired. Https taxes hrblock com   If the participant is a 5% owner of the employer maintaining the plan, the participant must begin receiving distributions by April 1 of the first year after the calendar year in which the participant reached age 70½. Https taxes hrblock com For more information, see Tax on Excess Accumulation in Publication 575. Https taxes hrblock com Distributions after the starting year. Https taxes hrblock com   The distribution required to be made by April 1 is treated as a distribution for the starting year. Https taxes hrblock com (The starting year is the year in which the participant meets (1) or (2) above, whichever applies. Https taxes hrblock com ) After the starting year, the participant must receive the required distribution for each year by December 31 of that year. Https taxes hrblock com If no distribution is made in the starting year, required distributions for 2 years must be made in the next year (one by April 1 and one by December 31). Https taxes hrblock com Distributions after participant's death. Https taxes hrblock com   See Publication 575 for the special rules covering distributions made after the death of a participant. Https taxes hrblock com Distributions From 401(k) Plans Generally, distributions cannot be made until one of the following occurs. Https taxes hrblock com The employee retires, dies, becomes disabled, or otherwise severs employment. Https taxes hrblock com The plan ends and no other defined contribution plan is established or continued. Https taxes hrblock com In the case of a 401(k) plan that is part of a profit-sharing plan, the employee reaches age 59½ or suffers financial hardship. Https taxes hrblock com For the rules on hardship distributions, including the limits on them, see Regulations section 1. Https taxes hrblock com 401(k)-1(d). Https taxes hrblock com The employee becomes eligible for a qualified reservist distribution (defined next). Https taxes hrblock com Certain distributions listed above may be subject to the tax on early distributions discussed later. Https taxes hrblock com Qualified reservist distributions. Https taxes hrblock com   A qualified reservist distribution is a distribution from an IRA or an elective deferral account made after September 11, 2001, to a military reservist or a member of the National Guard who has been called to active duty for at least 180 days or for an indefinite period. Https taxes hrblock com All or part of a qualified reservist distribution can be recontributed to an IRA. Https taxes hrblock com The additional 10% tax on early distributions does not apply to a qualified reservist distribution. Https taxes hrblock com Tax Treatment of Distributions Distributions from a qualified plan minus a prorated part of any cost basis are subject to income tax in the year they are distributed. Https taxes hrblock com Since most recipients have no cost basis, a distribution is generally fully taxable. Https taxes hrblock com An exception is a distribution that is properly rolled over as discussed under Rollover, next. Https taxes hrblock com The tax treatment of distributions depends on whether they are made periodically over several years or life (periodic distributions) or are nonperiodic distributions. Https taxes hrblock com See Taxation of Periodic Payments and Taxation of Nonperiodic Payments in Publication 575 for a detailed description of how distributions are taxed, including the 10-year tax option or capital gain treatment of a lump-sum distribution. Https taxes hrblock com Note. Https taxes hrblock com A recipient of a distribution from a designated Roth account will have a cost basis since designated Roth contributions are made on an after-tax basis. Https taxes hrblock com Also, a distribution from a designated Roth account is entirely tax-free if certain conditions are met. Https taxes hrblock com See Qualified distributions under Qualified Roth Contribution Program, earlier. Https taxes hrblock com Rollover. Https taxes hrblock com   The recipient of an eligible rollover distribution from a qualified plan can defer the tax on it by rolling it over into a traditional IRA or another eligible retirement plan. Https taxes hrblock com However, it may be subject to withholding as discussed under Withholding requirement, later. Https taxes hrblock com A rollover can also be made to a Roth IRA, in which case, any previously untaxed amounts are includible in gross income unless the rollover is from a designated Roth account. Https taxes hrblock com Eligible rollover distribution. Https taxes hrblock com   This is a distribution of all or any part of an employee's balance in a qualified retirement plan that is not any of the following. Https taxes hrblock com A required minimum distribution. Https taxes hrblock com See Required Distributions , earlier. Https taxes hrblock com Any of a series of substantially equal payments made at least once a year over any of the following periods. Https taxes hrblock com The employee's life or life expectancy. Https taxes hrblock com The joint lives or life expectancies of the employee and beneficiary. Https taxes hrblock com A period of 10 years or longer. Https taxes hrblock com A hardship distribution. Https taxes hrblock com The portion of a distribution that represents the return of an employee's nondeductible contributions to the plan. Https taxes hrblock com See Employee Contributions , earlier, and Rollover of nontaxable amounts, next. Https taxes hrblock com Loans treated as distributions. Https taxes hrblock com Dividends on employer securities. Https taxes hrblock com The cost of any life insurance coverage provided under a qualified retirement plan. Https taxes hrblock com Similar items designated by the IRS in published guidance. Https taxes hrblock com See, for example, the Instructions for Forms 1099-R and 5498. Https taxes hrblock com Rollover of nontaxable amounts. Https taxes hrblock com   You may be able to roll over the nontaxable part of a distribution to another qualified retirement plan or a section 403(b) plan, or to an IRA. Https taxes hrblock com If the rollover is to a qualified retirement plan or a section 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover, the transfer must be made through a direct (trustee-to-trustee) rollover. Https taxes hrblock com If the rollover is to an IRA, the transfer can be made by any rollover method. Https taxes hrblock com Note. Https taxes hrblock com A distribution from a designated Roth account can be rolled over to another designated Roth account or to a Roth IRA. Https taxes hrblock com If the rollover is to a Roth IRA, it can be rolled over by any rollover method, but if the rollover is to another designated Roth account, it must be rolled over directly (trustee-to-trustee). Https taxes hrblock com More information. Https taxes hrblock com   For more information about rollovers, see Rollovers in Pubs. Https taxes hrblock com 575 and 590. Https taxes hrblock com Withholding requirement. Https taxes hrblock com   If, during a year, a qualified plan pays to a participant one or more eligible rollover distributions (defined earlier) that are reasonably expected to total $200 or more, the payor must withhold 20% of the taxable portion of each distribution for federal income tax. Https taxes hrblock com Exceptions. Https taxes hrblock com   If, instead of having the distribution paid to him or her, the participant chooses to have the plan pay it directly to an IRA or another eligible retirement plan (a direct rollover), no withholding is required. Https taxes hrblock com   If the distribution is not an eligible rollover distribution, defined earlier, the 20% withholding requirement does not apply. Https taxes hrblock com Other withholding rules apply to distributions that are not eligible rollover distributions, such as long-term periodic distributions and required distributions (periodic or nonperiodic). Https taxes hrblock com However, the participant can choose not to have tax withheld from these distributions. Https taxes hrblock com If the participant does not make this choice, the following withholding rules apply. Https taxes hrblock com For periodic distributions, withholding is based on their treatment as wages. Https taxes hrblock com For nonperiodic distributions, 10% of the taxable part is withheld. Https taxes hrblock com Estimated tax payments. Https taxes hrblock com   If no income tax is withheld or not enough tax is withheld, the recipient of a distribution may have to make estimated tax payments. Https taxes hrblock com For more information, see Withholding Tax and Estimated Tax in Publication 575. Https taxes hrblock com Section 402(f) Notice. Https taxes hrblock com   If a distribution is an eligible rollover distribution, as defined earlier, you must provide a written notice to the recipient that explains the following rules regarding such distributions. Https taxes hrblock com That the distribution may be directly transferred to an eligible retirement plan and information about which distributions are eligible for this direct transfer. Https taxes hrblock com That tax will be withheld from the distribution if it is not directly transferred to an eligible retirement plan. Https taxes hrblock com That the distribution will not be subject to tax if transferred to an eligible retirement plan within 60 days after the date the recipient receives the distribution. Https taxes hrblock com Certain other rules that may be applicable. Https taxes hrblock com   Notice 2009-68, 2009-39 I. Https taxes hrblock com R. Https taxes hrblock com B. Https taxes hrblock com 423, available at www. Https taxes hrblock com irs. Https taxes hrblock com gov/irb/2009-39_IRB/ar14. Https taxes hrblock com html, contains two updated safe harbor section 402(f) notices that plan administrators may provide recipients of eligible rollover distributions. Https taxes hrblock com If the plan allows in-plan Roth rollovers, the 402(f) notice must be amended to reflect this. Https taxes hrblock com Notice 2010-84 contains guidance on how to modify a 402(f) notice for in-plan Roth rollovers. Https taxes hrblock com Timing of notice. Https taxes hrblock com   The notice generally must be provided no less than 30 days and no more than 180 days before the date of a distribution. Https taxes hrblock com Method of notice. Https taxes hrblock com   The written notice must be provided individually to each distributee of an eligible rollover distribution. Https taxes hrblock com Posting of the notice is not sufficient. Https taxes hrblock com However, the written requirement may be satisfied through the use of electronic media if certain additional conditions are met. Https taxes hrblock com See Regulations section 1. Https taxes hrblock com 401(a)-21. Https taxes hrblock com Tax on failure to give notice. Https taxes hrblock com   Failure to give a 402(f) notice will result in a tax of $100 for each failure, with a total not exceeding $50,000 per calendar year. Https taxes hrblock com The tax will not be imposed if it is shown that such failure is due to reasonable cause and not to willful neglect. Https taxes hrblock com Tax on Early Distributions If a distribution is made to an employee under the plan before he or she reaches age 59½, the employee may have to pay a 10% additional tax on the distribution. Https taxes hrblock com This tax applies to the amount received that the employee must include in income. Https taxes hrblock com Exceptions. Https taxes hrblock com   The 10% tax will not apply if distributions before age 59½ are made in any of the following circumstances. Https taxes hrblock com Made to a beneficiary (or to the estate of the employee) on or after the death of the employee. Https taxes hrblock com Made due to the employee having a qualifying disability. Https taxes hrblock com Made as part of a series of substantially equal periodic payments beginning after separation from service and made at least annually for the life or life expectancy of the employee or the joint lives or life expectancies of the employee and his or her designated beneficiary. Https taxes hrblock com (The payments under this exception, except in the case of death or disability, must continue for at least 5 years or until the employee reaches age 59½, whichever is the longer period. Https taxes hrblock com ) Made to an employee after separation from service if the separation occurred during o