Tax Sheltered Annuities 403B
Overview
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Contribution Limits: $23,500 (2025) for Elective Deferrals
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Age 50-59 and 64+ Make-Up Contribution: $7,500 (2024-2025)
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Age 60-63 (2025) Make-Up Contribution: $11,250
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15-Year Employment Service: $3,000 Additional Contribution
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Aggregate All Plans Limit (2025): $70,000
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Premature Pension Distribution Penalty: Applies
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RMD Rules: Generally apply
Related IRC Section and IRS Publications and Forms
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Pub 571 – Tax-Sheltered Annuity Programs for Employee of Public Schools and Certain Tax-Exempt Organizations
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Pub 575 – Pension and Annuity Income
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Form 5329 - Additional Taxes on Qualified Plans
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Sec 403(b)
Employees of tax-exempt educational, charitable and religious organizations or public schools get special tax advantages from annuities bought for them, or contributions made to custodial accounts, by the exempt employer. These plans are most frequently encountered when dealing with public school teachers.
California Differences - Tax Sheltered Annuities
California follows Federal law, so no adjustment to federal adjusted gross income is required.