Click here to view the summary of the 2013 and 2014 comparisons.
 
Basic Annual Limit
 
  • $17,500 for 2013
  • $17,500 for 2014

The calendar year limits for elective deferrals are defined as 100% of compensation up to the $17,500 total for 2013 and 2014. This limit applies to all employees.


Service Based “Catch-up” Limit - 402(g) - Applicable to 403(b) Only
Employees with fifteen or more years of service with the school district may be eligible for a special higher annual limit of $20,500 ($3,000 additional per year). To qualify, a participant’s prior average annual contributions must not exceed $5,000 per year. This extra annual amount of $3,000 per year is capped at a cumulative limit of $15,000. The participant’s age is not a factor for determining eligibility for this higher limit.
Employees who qualify for this catch-up must take this amount prior to taking advantage of the Age-Based Catch-up. The special Catch-Up provision is calculated and used prior to using the Age-Based additional amount.

 

Excess contributions occur when the total contributions are greater than the maximum contribution limit (MAC), resulting in additional taxes and/or penalties.


Age Based Additional Amount

  • Employees who are age 50 or older by December 31, 2013 may contribute an additional $5,500 above the basic 2013 annual limit of $17,500 for a total of $23,000. Likewise, employees who are age 50 or older by December 31, 2014 may contribute an additional $5,500 above the basic 2014 annual limit of $17,500 for a total of $23,000.

  • The participant’s years of service with the school district or college is not a factor in determining eligibility for this higher limit.
     

  • Employees who contribute to both a 403(b) and 401(k) account are limited to one age-based additional amount per year between the accounts. 457(b) accounts also have an Age-Based additional amount that does not offset the 403(b) and/or 401(k) amount.

 


Contribution Accounting Formula

  • Step 1: The Basic Annual Amount is reduced by the following

    • Contributions made to all plans of the employer including 401(k) but excluding 457(b).
    • 403(b) contributions made to other employer plans,
    • Contributions to SEP or 401(k) in which the employee would have a 50% interest.
  • Step 2: Employees eligible for the Service Based catch-up must apply this amount prior to utilizing the Age Based catch-up.
  • Step 3: The eligible age based limitation is applied to the final basic annual limitation.

 These rules are explained further in IRS Publication 571.

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Participants should seek further information regarding their MAC limit each year from their account representative or professional advisor. Click here to go to our online MAC Calculator.
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Summary of Maximum Contribution Limits for 2013 and 2014*
*as published by the Internal Revenue Service

 
  2013 2014
Elective Deferrals (401(k) & 403(b) Plans)   $17,500.00   $17,500.00
457 Deferral Limit   $17,500.00  $17,500.00
Age Based Catch-Up Contributions (403(b) & 457(b) Plans)     $5,500.00    $5,500.00
Service Based Catch-Up Contributions (403(b) Plan Only)     $3,000.00    $3,000.00


For more information concerning rules and regulations for 403(b) accounts, see IRS Publication 571. You may download a copy of this official publication from the Internal Revenue Service website at www.irs.gov  For a more detailed description of the Tax Law changes, visit the "What's New" section of our site.



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