Can I deduct employer 401k contributions on my taxes or does contributions have to come out of my paycheck?

Forum|Forum|7 years ago
June 6, 2019
3 replies
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I have a fully vested 401k plan. Under my union contract, I receive a small blended benefit amount separate from my salary not listed on my paycheck that goes into my medical insurance reserve that caps at 3 months of my health and dental insurance premiums. Once my medical reserve reaches it's cap, my blended benefit amount goes into my 401k listed as excess health and welfare contributions.

DoninGA

Level 15

Employer contributions are not deductible on a tax return.

jlizam23Author

Level 2

So the contributions have to come out of my check in order to be able to deduct?

Opus 17

Level 15

By law and design, contributions can only be made to a 401k via your employer. This applies to both free money contributed by your employer as a a benefit, and any voluntary contributions you make by salary reduction. Both types of contributions are considered identical under the tax law. They should not be included in your W-2 box 1 taxable wages — that is your tax deduction. They are not included in taxable income so you never pay income tax. You can't list them as a separate tax deduction because they are already not taxed.