457b--is it an Individual Retirement Arrangement?

[Mark-D-in-LA]

I want to know if I can make a Qualified Charitable Distribution as part of the Required Minimum Distribution from my 457b. The IRS Retirement Topics on RMDs says RMD rules apply to 457b plans. In the 590B publication it says 457b plans are "deemed IRAs". And the A in IRA means BOTH Arrangement and Account. Old articles I read from the internet (including Intuit)  from 2019 said that QCDs could not be made from 457b plans.

If the answer is no, can someone please tell me WHY? Traditional IRA contributions are not taxed until retirement and its the same for 457b plans. Why would there be a difference?

Inquiring mind wants to know the deets. Any help would be appreciated.

[Mike9241]

from PUB 590-b

Deemed IRAs. A qualified employer plan (your 457-b plan) can maintain a separate account or annuity under the plan (a deemed IRA) to receive voluntary employee contributions. If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. 

you must have this separate account maintained under your employer's plan and make the QCD from it not the 457-b portion. Generally, the rules for a 457-b are not consistent with the rules for an IRA that's why the separate "IRA" account is required.

[Hal_Al]

If you have savings in an employer-sponsored plan such as a 401(k), 403(b), or 457 plan, you can't make a QCD directly from these plans to a charity. However, you can roll over amounts from these plans to an IRA, and then use the IRA to make the QCD.

Reference: https://www.forbes.com/sites/stevevernon/2022/01/24/retirees-beware-of-traps-for-the-unwary-regardin...

[dmertz]

Deemed IRAs are uncommon.  A deemed IRA is essentially a separate IRA account managed by the 457(b) plan provider but otherwise treated independently of the 457(b).  If all of you own contributions to the 457(b) were reported with either code G or code EE in box 12 of your Forms W-2, you do not have a deemed IRA and nothing about your 457(b) is an IRA.  If you had a deemed IRA, you would not be asking this question because you would already have to have known that it was a deemed IRA to be able to make and properly report the contributions to the deemed IRA.  If you had a deemed IRA, you would have received Forms 5498 reporting the contributions you made to the deemed IRA.

Since your participation in the 457(b) almost certainly does not involve a deemed IRA, any QCD would have to be made by first rolling funds from the traditional account in the 457(b) to a traditional IRA, then making the QCD from the traditional IRA.  If you have reached the age where you are required to take an RMD from the 457(b), you must first satisfy that RMD before rolling over any other amounts to an IRA.

[NCperson]

@Mark-D-in-LA  are you still working at this firm where you ahve the 457b? if no, why not just make life simpler and roll it to an IRA (no tax consequences).  if still working at the firm, then i understand the dilemma.