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February 16, 2009

Nondeductible employee contribution (NEC)



Contribution made by a participant to an employer sponsored plan on an after-tax basis. Nondeductible employee contributions are typically made to a 401(k) or 403(b) plan. Nondeductible employee contribution are usually maintained in separate accounts from other plan assets

Referring Cite

IRC § 401(k), IRC § 403(b),

Additional Helpful Information

  • Nondeductible employee contributions are subject to the actual contribution percentage test

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Qualified Charitable Distribution (QCD)

Definition A distribution that is excludable from the distributee’s income, as a result of meeting the following requirements: It is made after the distributee reaches

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Catch-up Contribution

Definition An additional contribution that can be made to a retirement plan by a participant who is at least age-50 by the end of the

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IRA Rules