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Are contributions to a 401(k) Plan excluded from employer withholding?

April 26, 2017contributions employer excluded Plan withholding

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Are contributions to a 401(k) Plan excluded from employer withholding?

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(We follow the State of PA in determining taxable wages) Answer: 401(k) contributions are treated the same, whether made inside or outside a cafeteria plan. Elective payments are considered part of the employee’s taxable compensation and are subject to withholding requirements.