Qualified distribution- Roth 401(k)
Definition A distribution from a Roth 401(k) that satisfies certain requirements, resulting in the distribution being tax-free and penalty free. Distributions that are non-qualified may
401K
A tax-deferred employer-provided retirement savings account, to which eligible employees may defer part of their salary. Salary deferral can be pre-tax or post-tax include Roth 401(k)s.
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CODA (Cash or deferred arrangement)
Definition An arrangement under which employees can make a cash or deferred election to have money withheld from their wages and credited to their account under
Modification (SEPP)
Definition The disqualification of a substantially equal periodic payment (SEPP) program. If a SEPP program is modified, the taxpayer is required to pay the IRS
Plan Document
Definition The document that provides the rules that govern the terms and conditions under which a retirement account is operated. Employer sponsored plans generally have
Rollover Eligible
Definition Another name for eligible rollover distribution (ERD), which is used in reference to a distribution that is eligible to be rolled over to an
Taxable Wage Base
Definition The Taxable Wage Base refers to the maximum amount of wages that can be used to compute social security contributions. Referring Cite Treas. Reg.
In-service Withdrawal
Definition A withdrawal (distribution) which is made from a qualified plan or 403(b) account while the account owner is still working for the plan sponsor (the
T.C. Summary Opinion 2009-37: Bailey v. Commissioner: Early Distribution Penalty Applies, because the account is an IRA
This case confirms that the early distribution penalty exception for first time home buyers does not apply to retirement accounts unless they are IRAs, i.e.
Annual Addition
Definition An Annual Addition is the total amount credited to a participant’s account for any limitation year. This includes: Employer contributions; Employee contributions; and Forfeitures.
