Figuring the Limit on Elective Deferrals(p9)

You can use Part II of Worksheet 1 in chapter 9 to figure the limit on elective deferrals.

Floyd has figured his limit on annual additions. The only other component needed before he can determine his MAC for 2011 is his limit on elective deferrals.

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 2011 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.

Floyd has determined that his limit on annual additions for 2011 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 2011 is $16,500, the lesser of both limits.

Part I. Limit on Annual Additions
1.	Enter your includible compensation for your most recent year of service	1.	$70,475
2.	Maximum: For 2010, enter $49,000 For 2011, 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 2010, enter $16,500 For 2011, 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 made for you by the qualifying organization for prior years	8.
9.	Subtract line 8 from line 7. If zero or less, enter zero (-0-)	9.
10.	Maximum increase in limit for long service	10.	15,000
11.	Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year rule	11.
12.	Enter the aggregate amount of all designated Roth contributions permitted for prior years under the 15-year rule	12.
13.	Add lines 11 and 12	13.
14.	Subtract line 13 from line 10	14.
15.	Maximum additional contributions	15.	3,000
16.	Enter the least of lines 9, 14, or 15. This is your increase in the limit for long service	16.	-0-
17.	Add lines 4 and 16. This is your limit on elective deferrals	17.	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