What plan does my retirement disability payments g...
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
georgia_gunning
New Member

What plan does my retirement disability payments go under (qualified, non-qualified, or something else)? these are my monthly benefits.

This is a State of Maine employee benefit
2 Replies
ColeenD3
Employee Tax Expert

What plan does my retirement disability payments go under (qualified, non-qualified, or something else)? these are my monthly benefits.

If this post doesn't clarify the issue, you will need to ask the state.

 

Qualified plans are designed to offer individuals added tax benefits on top of their regular retirement plans, such as IRAs. Employers deduct an allowable portion of pretax wages from the employees, and the contributions and the earnings then grow tax-deferred until withdrawal.

 

Qualified retirement plans can include: A qualified employee plan such as a section 401(k) plan, including single participant or "solo" plan for sole proprietors. A qualified employee 403(a) annuity plan. A 403(b) tax-sheltered annuity plan for employees of public schools or tax-exempt organizations.

 

Non-qualified plans are those that are not eligible for tax-deferral benefits. Consequently, deducted contributions for non-qualified plans are taxed when income is recognized. This generally refers to when employees must pay income taxes on benefits associated with their employment.

The main difference between the two plans is the tax treatment of deductions by employers, but there are other differences. A plan must meet several criteria to be considered qualified, including:

  • Disclosure - Documents pertaining to the plan's framework and investments must be available to participants upon request.
  • Coverage - A specified portion of employees, but not all, must be covered.
  • Participation - Employees who meet eligibility requirements must be permitted to participate.
  • Vesting - After a specified duration of employment, a participant's rights to pensions are non-forfeitable benefits.
  • Nondiscrimination - Benefits must be proportionately equal in assignment to all participants in order to prevent excessive weighting in favor of higher-paid employees
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
TomD8
Level 15

What plan does my retirement disability payments go under (qualified, non-qualified, or something else)? these are my monthly benefits.

 MainePERS is a federally qualified defined benefit plan under IRS Code Section 401(a).

https://www.mainepers.org/while-working/faqs/

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

Dynamic AdsDynamic Ads
v
Privacy Settings