deddleman[at]sfidwater.org wrote:
- quote -

with CSU and UC employees who belonged to CAlPers. I don't recall
they having the option for pre-tax payroll deduction to buy
additional service credit. I am guessing, that this is probably
a state employee whose employer offers this option.

As the payment is coming out of wages and it is elective, I would
assume that it would be treated exactly the same as the regular
pre-tax contributions to the plan. Box 1 of the W-2 would not
reflect the amount withheld as taxable wages and Box 12 would
have the amount contributed with the code that reflected which
CalPers plan the employee belonged to.

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- quote -

As a clarification, the plan is through CalPERS and they permit
members to choose whether the deduction is pre- or post-tax. The
member chose pre-tax. My read on Box 14 is that it's either
involuntary contributions or voluntary after-tax, so I don't think it
applies.

It's not 403(b) or 457. I don't see any codes for Box 12 that apply,
either.

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Arthur Kamlet wrote:
- quote -

statement that your answer is predicated on the payment being
"pre-tax."

All of the state pension plans I am familiar with that allow a
member to buy service credit, do not have pre-tax payroll
deduction for buying of credits. Buying of credits required a
post-tax payment by the member. If the payment was made via
payroll deduction, it showed up in Box 14 Other of the W-2. If
the payment was made directly, there was nothing on the W-2.

The after-tax amount contributed becomes part of the employees
cost basis and would get reflected as an employee contribution on
a 1099-R once the employee starts to take distributions from the
plan.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <55da15ca-44ae-4a3f-9a44-d606c4794216[at]y1g2000pra.googlegroups.com> ,
<deddleman[at]sfidwater.org> wrote:
- quote -


Step 1 is to confirm that you meet the requirements of being
a qualified employer savings plan.

Since you are a local government, I am guessing, but you should confirm,
that this is a 403(b) plan.

If the service credit being bought with pre-tax money, and is coming
out of gross pay, and if the plan allows this, then W-2 box 1 is
reduced by that pretax amount, but box 5 (Medicare wages) is not.

I assume you do not contribute to social security, and if true,
boxes 3 and 4 are blank.

Box 12 would contain the pretax amount, and be coded as E, which
is the code for a 403(b) plan.

- quote -

--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

We are a local government with a pension plan through the state
retirement system, a 401(a) plan. One of our employees is buying
service credit through the pension. I know that what he pays from his
paycheck is tax deferred. I don't know how it gets reported on his
W-2. Does it go in box 12 and, if so, what's the code? Or does it not
go on at all?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >