Since the benefit is on a pre-tax basis, are tax-deferred contributions affected?
If an employee is contributing at or near the maximum amount to a supplemental retirement income (IRC 401(k)), a tax sheltered annuity (IRC 403(b)), or a deferred compensation plan (IRC 457), the employee may need to decline the pre-tax parking benefit or adjust his or her tax-deferred contribution because participation in the pre-tax parking benefit reduces the income available for sheltering under those plans. Social security earnings upon retirement may also be marginally affected due to the reduced social security contribution. Employees should consult their tax advisors with questions.
Related Questions
- How do I keep track of the cost basis in an IRA into which I rolled over both pre-tax and after-tax contributions I made to my employers 401K plan?
- How do I keep track of the cost basis in an IRA into which I rolled over both pre-tax and after-tax contributions to my employers 401K plan?
- Since the benefit is on a pre-tax basis, are tax-deferred contributions affected?
