skip navigation

Search Help
Navigation Help

Topic Index
ABCDEFGHI
JKLMNOPQR
STUVWXYZ#

FAQs
Forms
Publications
Tax Topics

Comments
About Tax Map

IRS.gov Website

Frequently Asked Tax Questions

Pensions/Annuities/Retirement Plans (i.e., 401(k), etc.) - Plan Operations

  1. Am I considered covered by an employer sponsored retirement plan for the year if I do not participate in the plan or if I did not work long enough to be vested?
  2. What is the maximum amount that I can contribute to my 401(k) plan?
  3. My understanding is that the 10% additional tax on early distributions is forgiven if I am over age 55 and default on a loan through my 401(k) plan when I have a separation from service with my employer. Can you confirm that for me?
  4. Where can I find additional information on tax-favored retirement plans?

Rev. date: 1/1/2011

Am I considered covered by an employer sponsored retirement plan for the year if I do not participate in the plan or if I did not work long enough to be vested?

The answer to this question depends on the type of retirement plan.
Generally, if your employer's plan has a separate account for each employee, it is a defined contribution plan.
In the other type of plan, a defined benefit plan:
The Form W-2 (PDF) you receive from your employer has a box used to indicate whether you were covered for the year. The "Retirement Plan" box should be checked if you were covered in a plan sponsored by the employer.

Rev. date: 12/16/2010

What is the maximum amount that I can contribute to my 401(k) plan?

The rules for retirement plans are complex. Your plan administrator should have written information about your particular plan that explains the limitations imposed by law as well as other limitations that apply under the plan:

Rev. date: 8/31/2010

My understanding is that the 10% additional tax on early distributions is forgiven if I am over age 55 and default on a loan through my 401(k) plan when I have a separation from service with my employer. Can you confirm that for me?

If you default on a loan from your 401(k) plan:
For example, the 10% additional tax on early distributions does not apply if all the following apply to you:
There are a number of exceptions to the 10% additional tax on early distributions. You may wish to refer to Instructions for Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts Publication 575, Pension and Annuity Income, and Publication 560, Retirement Plans for Small Business, for additional information.

Rev. date: 9/19/2011

Where can I find additional information on tax-favored retirement plans?

The following IRS publications include additional information on retirement plans:
You may find additional information on the IRS website.
Additional Information
Types of Retirement Plans