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IRS Updates Self-Assessment Tool for 403(b) and 457(b) Plans, Others

By NTSA Net Staff • July 07, 2017 • 0 Comments
The IRS has issued an updated version of its Form 14581-E, “Retirement Plan Coverage Compliance Self-Assessment For State and Local Government Entities.” The form is for use by systems that offer 403(b) and 457(b) plans, as well as other benefits.

Form 14581 asks those offering 403(b) and 457(b) plans if employee deferrals are exempt from federal income tax withholding but are subject to Social Security and Medicare taxes. However, it asks them different questions regarding employer contributions. The form asks whether:

  • employer contributions to 403(b)s are exempt from federal income tax withholding, Social Security and Medicare taxes; and

  • employer contributions to 457(b)s are exempt from federal income tax withholding but subject to Social Security and Medicare taxes when no longer subject to substantial risk of forfeiture.

The self-assessment tools are intended as general guides to the most common tax issues entities offering 403(b)s and 457(b)s, as well as other benefits, may encounter and to help them identify areas that indicate potential compliance issues. They are intended to be completed by those responsible for withholding and paying employment taxes and filing required information returns.

The Form 14581 series consists of seven topical employment tax compliance self-assessment tools for voluntary use by government entities to conduct self-assessments of their compliance with these requirements. The forms have fillable check box and text fields so they can be completed electronically or printed and completed manually.

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