I changed positions on July 1st and due to incompetence in our benefits office was told I could not make 403(b) contributions. It took four months to get this fixed, as a result my contributions will be far from the maximum which was my original aim.
Are there any options from a tax filing perspective for someone in my position when a mistake like this has been made? I don't think there is any way to contribute to a 403(b) retrospectively. I'll be maxing out IRA and 529 plan (filing in Maryland) but missing out on most of the 403(b) is a huge hit.
Thanks!
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@rflick can you increase your contributions dramatically with the few paychecks that remain for 2023?
@NCperson thanks for your suggestion. Unfortunately I cannot. Most of my salary is paid by grants that are not eligible for 403(b) contributions, which was the source of confusion for the benefits office. Only about $600 per twice-monthly pay cycle is eligible, which I'll be maxing out until end of the year, but still leaves me far short.
There is nothing I know of in law that creates a cure for this situation. It might be possible, if the employer is willing, to re-issue your prior paychecks (you pay them back your salary and then they re-issue the paycheck with the different contributions)--but I don't even know for sure if this is possible and the employer would have to be willing. I don't know of any way to force them to comply. There is also no way to contribute directly to the 403b, it has to come from the employer. And (unlike an IRA) you can't direct contributions from January-April 2024 to be considered as retroactive to 2023.
I am also slightly concerned about the overall picture here. You can only contribute to an IRA up to your compensation from working. Are these grants considered compensation? If only your $600 per check is considered compensation, and you put that all into a 403b, do you have any compensation left over to validate your IRA contributions? I'd like another expert to comment on that.
See the IRS 403(b) Plan Fix It Guide #4:
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