INTERNAL REVENUE CODE CONTRIBUTION LIMITS
Internal Revenue Code (IRC) §457(b)(2) limits the amount of salary deferral contributions that can be contributed to the City of West Union 457(b) Employee Retirement Plan and to all IRC §457(b) plans and other similar type of plans in which an employee participates in any calendar year. For further explanation, see the reverse of this form or consult your tax advisor.
Annual Dollar Limit on Elective Deferrals (IRC §457(b)(2))
Internal Revenue Code (IRC) §457(b)(2) limits the amount of salary deferral contributions that can be contributed to the City of West Union 457(b) Employee Retirement Plan and to all IRC §457(b) plans and other similar type of plans in which an employee participates in any calendar year. The annual dollar limit is the lesser of 100 percent of the employee’s compensation for the calendar year, or the “applicable dollar amount” which is $22,500 in 2023. An employee must self-monitor elective deferrals made to any other current or former employer retirement plans, to avoid exceeding the IRC limits.
Age 50 or Older Catch-up Contributions (IRC §414(v)(2))
For participants who are at least age 50 before the end of the plan year, the current dollar limits on elective deferrals are increased. The additional elective deferrals that are permitted to be made by an eligible participant is the lesser of the participant’s compensation for the year reduced by any other elective deferrals of the participant for the year or the “applicable dollar amount” which is $7,500 for 2023.
Special 3-year Plan Catch-Up Limitation
If the applicable year is one of an Employee’s last year 3 calendar years ending before the Participant attains Normal Retirement Age, the Employee may be eligible for additional deferrals. Consult the Plan Representative or Plan Document for additional information.
The City of West Union cannot give tax advice. If you have questions about how tax law may affect your situation, please consult a tax advisor.