The 403(b) elective deferrals salary reduction agreement means you have a retirement plan at work (similar to 401k plans), where employer takes money out of your paycheck before you receive it and deposits it into your 403(b) retirement plan. The plan is considered an elective deferral, meaning you do not report the deposits into the plan as taxable income, which in a way is a tax deduction. If your employer makes any matching contributions to the plan, they are not taxable as well. The total amount deposited shows on your W2, box 12 and is not included in W2 box 1, as taxable wages.
