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What is considered a “Qualified Retirement Plan”?

 
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What is considered a “Qualified Retirement Plan”?

A qualified retirement plan is an employer's plan to benefit employees that meets specific Internal Revenue Code requirements. These plans may qualify for special tax benefits, such as tax deferral for employer contributions. Your contributions may also qualify for tax deferral.

Examples of qualified plans are:  401(k) plans403(b) plansSARSEP plansSEP-IRA plans, and SIMPLE IRA plans

To determine whether your plan is a qualified plan (most but not all plans are), check with your employer or the plan administration.

Non-qualified plans  are those that are not eligible for tax-deferral benefits.:

  • Public sector plans are nonqualified plans.
  • Internal Revenue Code Section 457 retirement plans for state and municipal employees and 403b programs for nonprofit organizations are nonqualified plans. They technically are deferred-compensation plans in which money is set aside from pay for retirement. The money isn't available to the employee until service with the employer ends and isn't considered taxable income until it is withdrawn.  Reference What Does "Non-Qualified Retirement Plan" Mean? | Finance - Zacks


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Level 1

What is considered a “Qualified Retirement Plan”?

A qualified retirement plan is an employer's plan to benefit employees that meets specific Internal Revenue Code requirements. These plans may qualify for special tax benefits, such as tax deferral for employer contributions. Your contributions may also qualify for tax deferral.

Examples of qualified plans are:  401(k) plans403(b) plansSARSEP plansSEP-IRA plans, and SIMPLE IRA plans

To determine whether your plan is a qualified plan (most but not all plans are), check with your employer or the plan administration.

Non-qualified plans  are those that are not eligible for tax-deferral benefits.:

  • Public sector plans are nonqualified plans.
  • Internal Revenue Code Section 457 retirement plans for state and municipal employees and 403b programs for nonprofit organizations are nonqualified plans. They technically are deferred-compensation plans in which money is set aside from pay for retirement. The money isn't available to the employee until service with the employer ends and isn't considered taxable income until it is withdrawn.  Reference What Does "Non-Qualified Retirement Plan" Mean? | Finance - Zacks