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Level 3
posted Apr 8, 2022 6:45:29 PM

415(c) Limit for 403(b)

Will a contribution to a nondeductible IRA need to be included in the aggregation rule 415(c) Limit?  So if my employer and my contributions to my 403(b) is $58,000 in 2021 can I still contribute to a nondeductible IRA?

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3 Replies
Expert Alumni
Apr 8, 2022 7:05:27 PM

Yes, you can. IRA is an individual retirement account separate from an employer-sponsor's retirement plan such as a 401(k) or a 403(b) plan. 

Level 3
Apr 8, 2022 7:17:15 PM

Thank you for a quick response.  My understanding is that I can't contribute to a SEP IRA for my side consulting job because that would put me over the 415(c) limit for a 403(b) which the IRS states is not the same as a 410K but I assumed a nondeductible IRA would be okay since it is after tax dollars so it does not add to the 415 (c) limit.  Or am I incorrect about a Sep IRA?

Expert Alumni
Apr 8, 2022 8:00:14 PM

As long as you have net self-employment income, you can open a SEP IRA, regardless of the fact you have maxed out employer-sponsored 401(k) or 403(b) contributions. You can claim the SEP IRA contributions as tax deductions, unlike the nondeductible IRA contribution if your income is over the limit.