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previous page Previous Page: Publication 571 - Tax-Sheltered Annuity Plans (403(b) Plans) - 15-Year Rule
next page Next Page: Publication 571 - Tax-Sheltered Annuity Plans (403(b) Plans) - Ministers and Church Employees
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taxmap/pubs/p571-014.htm#en_us_publink1000129436

Figuring the Limit on Elective Deferrals(p10)


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previous topic occurrence Limit on Elective Deferrals next topic occurrence

You can use Part II of Worksheet 1 in chapter 9 to figure the limit on elective deferrals.
taxmap/pubs/p571-014.htm#en_us_publink1000129437

Example(p10)


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Floyd has figured his limit on annual additions. The only other component needed before he can determine his MAC for 2009 is his limit on elective deferrals.
taxmap/pubs/p571-014.htm#en_us_publink1000129438

Figuring Floyd's limit on elective deferrals.(p11)


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Floyd has been employed with his current employer for less than 15 years. He is not eligible for the special 15-year increase. Therefore, his limit on elective deferrals for 2009 is $16,500, as shown in Table 4-2.
Floyd's employer will not make any nonelective contributions to his 403(b) account and Floyd will not make any after-tax contributions. Additionally, Floyd's employer does not offer a Roth contribution program.
taxmap/pubs/p571-014.htm#en_us_publink1000129439

Figuring Floyd's MAC(p11)


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Floyd has determined that his limit on annual additions for 2009 is $49,000 and his limit on elective deferrals is $16,500. Because elective deferrals are the only contributions made to Floyd's account, the maximum amount that can be contributed to a 403(b) account on Floyd's behalf in 2009 is $16,500, the lesser of both limits.

Table 4-2. Worksheet 1. Maximum Amount Contributable (MAC)

Note. Use this worksheet to figure your MAC.
Part I. Limit on Annual Additions  
1.Enter your includible compensation for your most recent year of service 1.$70,475
2.Maximum
  • For 2008, enter $46,000
  • For 2009, enter $49,000
2.49,000
3.Enter the lesser of line 1 or line 2. This is your limit on annual additions 3.49,000
 Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3 on line 18.   
Part II. Limit on Elective Deferrals  
4.Maximum contribution
  • For 2008 enter $15,500
  • For 2009 enter $16,500
4.16,500
 Note. If you have at least 15 years of service with a qualifying organization, complete lines 5 through 17. If not, enter zero (-0-) on line 16 and go to line 17.   
5.Amount per year of service 5. 5,000
6.Enter your years of service 6.            
7.Multiply line 5 by line 6 7.            
8.Enter the total of all elective deferrals for prior years made for you by qualifying organizations 8.            
9.Subtract line 8 from line 7. If zero or less, enter zero (-0-) 9.            
10.Maximum increase in limit for long service10.15,000
11.Enter all prior year increases in the limit for long service11.            
12.Enter the total amount of all designated Roth contributions for prior years12.            
13.Add lines 11 and 1213.            
14.Subtract line 13 from line 1014.            
15.Maximum additional contributions15. 3,000
16.Enter the least of lines 9, 14, or 15. This is your increase in the limit for long service16.-0-
17.Add lines 4 and 16. This is your limit on elective deferrals17.16,500
 Part III. Maximum Amount Contributable  
18.
  • If you had only nonelective contributions, enter the amount from line 3. This is your MAC.

  • If you had only elective deferrals, enter the lesser of lines 3 or 17. This is your MAC.

  • If you had both elective deferrals and nonelective contributions, enter the amount from line 3. This is your MAC. (Use the amount on line 17 to determine if you have excess elective deferrals as explained in chapter 7.)
18.$16,500
previous pagePrevious Page: Publication 571 - Tax-Sheltered Annuity Plans (403(b) Plans) - 15-Year Rule
next pageNext Page: Publication 571 - Tax-Sheltered Annuity Plans (403(b) Plans) - Ministers and Church Employees
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication