Final Regulations Govern FICA Taxation of 403(b) Contributions (Posted on November 19, 2007 by )


The regulations governing the FICA taxation of 403(b) transactions previously issued in temporary and proposed form have now been finalized with no changes.

TD 9159 (November 16, 2004) set forth temporary regulations on the FICA taxation of amounts contributed to a 403(b) arrangement pursuant to an employee’s election. Although amounts made pursuant to a one-time election were not considered “elective” for income tax purposes, the regulations still treated them as made pursuant to a salary reduction agreement for FICA purposes. Click here to see the text of the temporary regulation.

Notwithstanding various comments arguing for changes in the temporary and proposed rules, the Treasury Department has now finalized them with no changes.