To clarify, are your contributions made through a payroll deduction plan and reported in Box 12 of your W2?
Hey,
Thank you for your fast answer. They are deducted directly from my payroll since it is a contribution of employee-employer, but not reported on my W-2 box 12. The only thing reported in my W-2 is a mark "X" on the "Retirement Plan" at the bottom of box 13.
Appreciate it,
Sara
No. This is a payroll type of contribution, made with after tax dollars. Because of this, your contributions are not deductible on your part but the amount you contribute is considered basis to your retirement account.
Once you begin distributions at retirement, the basis is valuable because it will reduce the amount of taxable income of the distribution. Select the link given below and scroll to the area that mentions Service Credits.
[Edited 02/22/24|6:15 pm PST]