skip navigation
Search Help
Navigation Help

Tax Map Index

Tax Topic Index

Affordable Care Act
Tax Topic Index

Exempt Organization
Tax Topic Index

Tax Topics

About Tax Map Website
Publication 571

Chapter 4
Limit on Elective Deferrals(p8)

The second and final component of MAC is the limit on elective deferrals. This is a limit on the amount of contributions that can be made to your account through a salary reduction agreement.
A salary reduction agreement is an agreement between you and your employer that allows for a portion of your compensation to be directly invested in a 403(b) account on your behalf. You can enter into more than one salary reduction agreement during a year.
More than one 403(b) account. If, for any year, elective deferrals are contributed to more than one 403(b) account for you (whether or not with the same employer), you must combine all the elective deferrals to determine whether the total is more than the limit for that year.
403(b) plan and another retirement plan. If, during the year, contributions in the form of elective deferrals are made to other retirement plans on your behalf, you must combine all of the elective deferrals to determine if they are more than your limit on elective deferrals. The limit on elective deferrals applies to amounts contributed to:
  • 401(k) plans, to the extent excluded from income;
  • Roth contribution programs;
  • Section 501(c)(18) plans, to the extent excluded from income;
  • Savings incentive match plan for employees (SIMPLE plans);
  • Salary reduction simplified employee pension (SARSEP) plans; and
  • All 403(b) plans.

Roth contribution program.(p8)

Your 403(b) plan may allow you to designate all or a portion of your elective deferrals as Roth contributions. Elective deferrals designated as Roth contributions must be maintained in a separate Roth account and are not excludable from your gross income.
The maximum amount of contributions allowed under a Roth contribution program is your limit on elective deferrals, less your elective deferrals not designated as Roth contributions. For more information on the Roth contribution program, see Pub. 560, Retirement Plans for Small Business.
Excess elective deferrals.(p8)
If the amount contributed is more than the allowable limit, you must include the excess that is not a Roth contribution in your gross income for the year contributed.

General Limit(p8)

Under the general limit on elective deferrals, the most that can be contributed to your 403(b) account through a salary reduction agreement is $18,000 for 2015 and 2016. This limit applies without regard to community property laws.