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June 6, 2019
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For a 401k what does qualifying or non qualifying mean?

  • June 6, 2019
  • 1 reply
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Best answer by RachelW33

A 401(K) is a qualified plan.

A qualified retirement plan is an employer's plan to benefit employees that meets specific Internal Revenue Code requirements.  Because a 401(K) plan is a qualified plan, you are able to defer tax on the amounts you contribute to the plan.

A Non-qualified plan does not meet those requirements and therefore is not eligible for any tax-deferral benefits. 

1 reply

RachelW33
Alumni - Expert
RachelW33Alumni - ExpertAnswer
Alumni - Expert
June 6, 2019

A 401(K) is a qualified plan.

A qualified retirement plan is an employer's plan to benefit employees that meets specific Internal Revenue Code requirements.  Because a 401(K) plan is a qualified plan, you are able to defer tax on the amounts you contribute to the plan.

A Non-qualified plan does not meet those requirements and therefore is not eligible for any tax-deferral benefits. 

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