Publication 571
(Rev. January 2026)
Tax-Sheltered
Annuity Plans
(403(b) Plans)
For Employees of Public
Schools and Certain
Tax-Exempt
Organizations
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Future Developments
For the latest information about developments related to
Pub. 571, such as legislation enacted after it was
published, go to IRS.gov/Pub571.
What’s New for 2025
Catch-up contributions. Beginning 2025, people who
reached the ages of 60, 61, 62, or 63 before the end of the
tax year shall attain higher catch-up contributions between
the greater of $10,000 or 150% of the previous catch-up
limit, $7,500, in their 403(b) plans.
What’s New for 2026
Retirement savings contributions credit. For 2026,
the adjusted gross income limitations have increased from
$79,000 to $80,500 for married filing jointly filers; from
$59,250 to $60,375 for head of household filers; and from
$39,500 to $40,250 for single, married filing separately, or
qualifying surviving spouse with dependent child filers.
See chapter 10, Retirement Savings Contributions Credit
(Saver's Credit), for additional information.
Limit on elective deferrals. For 2026, the limit on elec-
tive deferrals has increased from $23,500 to $24,500.
Limit on annual additions. For 2026, the limit on an-
nual additions has increased from $70,000 to $72,000.
Reminders
Pension-Linked Emergency Savings Accounts. Sec-
tion 127 of the SECURE 2.0 Act of 2022 allows employers
to add an optional feature to provide short-term savings
accounts established and maintained in connection with a
defined contribution retirement plan, including certain
403(b) plans, and are treated as a type of designated Roth
account. Section 127 of the SECURE 2.0 Act of 2022 pro-
vides for the creation of Pension-Linked Emergency Sav-
ings Accounts (PLESAs) effective for plan years beginning
after December 31, 2023.
Safe harbor deferral-only section 403(b) plans. Sec-
tion 121(b) of the SECURE 2.0 Act of 2022 permits certain
eligible employers to have a safe harbor deferral-only sec-
tion 403(b) plan for plan years beginning after December
31, 2023.
Military spouse retirement plan eligibility credit. Sec-
tion 112 of the SECURE 2.0 Act of 2022 provides a busi-
ness credit for an eligible employer for participation and
benefits to a military spouse within 2 months of being
hired.
Matching contributions on account of qualified stu-
dent loan payments. Section 110 of the SECURE 2.0
Act of 2022 allows employers to include an optional fea-
ture that would enable them to make matching
Publication 571 (Rev. 1-2026) Catalog Number 46581C
Jan 7, 2026 Department of the Treasury Internal Revenue Service www.irs.gov
contributions on account of employees’ qualified student
loan payments under certain defined contribution retire-
ment plans, including 403(b) plans. Section 110 of the SE-
CURE 2.0 Act of 2022 applies to contributions made for
plan years beginning after December 31, 2023.
Credit for employer contributions. Section 102 of the
SECURE 2.0 Act of 2022 adds an increased small em-
ployer pension plan startup cost credit for qualifying small
employers with no more than 50 employees and a new
credit based on matching and nonelective contributions
made by qualifying small employers with no more than
100 employees.
Qualified disaster recovery distributions. A qualified
disaster recovery distribution is a distribution that meets
certain criteria as described in the SECURE 2.0 Act of
2022. It is a distribution made from an eligible retirement
plan to an individual whose main home was in a qualified
disaster area. You must have sustained an economic loss
because of the disaster to receive a qualified disaster re-
covery distribution. For more information, see Pub. 575,
Pension and Annuity Income.
De minimis financial incentives. For plan years begin-
ning after December 29, 2022, section 113 of the SE-
CURE 2.0 Act of 2022 permits employers to offer their em-
ployees de minimis financial incentives if they make
elective deferrals.
Distributions for emergency personal expenses. Be-
ginning with distributions made after December 31, 2023,
a distribution for an emergency personal expense is not
subject to the 10% additional tax on early distributions.
Distributions to a domestic abuse victim. For distribu-
tions made after December 31, 2023, a distribution made
to a domestic abuse victim is not subject to the 10% addi-
tional tax on early distributions.
Terminally ill individual. The 10% additional tax on
early distributions doesn't apply to distributions made to
terminally ill individuals.
Designated Roth nonelective contributions. Section
604 of the SECURE 2.0 Act of 2022 permits certain non-
elective contributions that are made after December 29,
2022, to be designated as Roth contributions.
Photographs of missing children. The IRS is a proud
partner with the National Center for Missing & Exploited
Children® (NCMEC). Photographs of missing children se-
lected by the Center may appear in this publication on pa-
ges that would otherwise be blank. You can help bring
these children home by looking at the photographs and
calling 1-800-THE-LOST (1-800-843-5678) if you recog-
nize a child.
Introduction
This publication can help you better understand the tax
rules that apply to your 403(b) (tax-sheltered annuity)
plan.
In this publication, you will find information to help you
do the following.
• Determine the maximum amount that can be contrib-
uted to your 403(b) account in 2026.
• Determine the maximum amount that could have been
contributed to your 403(b) account in 2025.
• Identify excess contributions.
• Understand the basic rules for claiming the retirement
savings contributions credit.
• Understand the basic rules for distributions and roll-
overs from 403(b) accounts.
This publication doesn’t provide specific information on
the following topics.
• Distributions from 403(b) accounts. This is covered in
Pub. 575, Pension and Annuity Income.
• Rollovers. This is covered in Pub. 590-A, Contributions
to Individual Retirement Arrangements (IRAs); and
Pub. 590-B, Distributions from Individual Retirement
Arrangements (IRAs).
How to use this publication. This publication is organ-
ized into chapters to help you find information easily.
Chapter 1 answers questions frequently asked by
403(b) plan participants.
Chapters 2 through 6 explain the rules and terms you
need to know to figure the maximum amount that could
have been contributed to your 403(b) account for 2025
and the maximum amount that can be contributed to your
403(b) account in 2026.
Chapter 7 provides general information on the preven-
tion and correction of excess contributions to your 403(b)
account.
Chapter 8 provides general information on distributions,
transfers, and rollovers.
Chapter 9 provides blank worksheets that you will need
to accurately and actively participate in your 403(b) plan.
Filled-in samples of most of these worksheets can be
found throughout this publication.
Chapter 10 explains the rules for claiming the retire-
ment savings contributions credit (saver's credit).
Comments and suggestions. We welcome your com-
ments about this publication and suggestions for future
editions.
You can send us comments through IRS.gov/
FormComments. Or, you can write to the Internal Revenue
Service, Tax Forms and Publications, 1111 Constitution
Ave. NW, IR-6526, Washington, DC 20224.
Although we can’t respond individually to each com-
ment received, we do appreciate your feedback and will
consider your comments and suggestions as we revise
our tax forms, instructions, and publications. Don’t send
tax questions, tax returns, or payments to the above ad-
dress.
Getting answers to your tax questions. If you have
a tax question not answered by this publication or the How
To Get Tax Help section at the end of this publication, go
to the IRS Interactive Tax Assistant page at IRS.gov/
Help/ITA where you can find topics by using the search
feature or by viewing the categories listed.
2 Publication 571 (1-2026)
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Useful Items
You may want to see:
Publication
517 Social Security and Other Information for
Members of the Clergy and Religious Workers
575 Pension and Annuity Income
590-A Contributions to Individual Retirement
Arrangements (IRAs)
590-B Distributions from Individual Retirement
Arrangements (IRAs)
Form (and Instructions)
W-2 Wage and Tax Statement
1099-R Distributions From Pensions, Annuities,
Retirement or Profit-Sharing Plans, IRAs,
Insurance Contracts, etc.
5329 Additional Taxes on Qualified Plans (Including
IRAs) and Other Tax-Favored Accounts
5330 Return of Excise Taxes Related to Employee
Benefit Plans
8880 Credit for Qualified Retirement Savings
Contributions
1.
403(b) Plan Basics
This chapter introduces you to 403(b) plans and accounts.
Specifically, the chapter answers the following questions.
• What is a 403(b) plan?
• What are the benefits of contributing to a 403(b) plan?
• Who can participate in a 403(b) plan?
• Who can set up a 403(b) account?
• How can contributions be made to my 403(b) ac-
count?
• Do I report contributions on my tax return?
• How much can be contributed to my 403(b) account?
590-A
590-B
W-2
1099-R
5329
5330
8880
What Is a 403(b) Plan?
A 403(b) plan, also known as a tax-sheltered annuity
(TSA) plan, is a retirement plan for certain employees of
public schools, employees of certain tax-exempt organiza-
tions, and certain ministers.
Individual accounts in a 403(b) plan can be any of the
following types.
• An annuity contract, which is a contract provided
through an insurance company.
• A custodial account, which is an account invested in
mutual funds or a group trust.
• A retirement income account set up for church em-
ployees. Generally, retirement income accounts can
invest in annuities, mutual funds, or other investments.
We use the term “403(b) account” to refer to any one of
these funding arrangements throughout this publication,
unless otherwise specified.
What Are the Benefits of
Contributing to a 403(b) Plan?
There are three benefits to contributing to a 403(b) plan.
• The first benefit is that you don’t pay income tax on al-
lowable contributions until you begin making withdraw-
als from the plan, usually after you retire. Allowable
contributions to a 403(b) plan are either excluded or
deducted from your income. However, if your contribu-
tions are made to a Roth contribution program, this
benefit doesn’t apply. Instead, you pay income tax on
the contributions to the plan but distributions from the
plan (if certain requirements are met) are tax free.
Note: Generally, employees must pay social secur-
ity tax and Medicare tax on their contributions to a
403(b) plan, including those made under a salary re-
duction agreement. See chapter 4, Limit on Elective
Deferrals, for more information.
• The second benefit is that earnings and gains on
amounts in your 403(b) account aren’t taxed until you
withdraw them. Earnings and gains on amounts in a
Roth contribution program aren’t taxed if your with-
drawals are qualified distributions. Otherwise, they are
taxed when you withdraw them.
• The third benefit is that you may be eligible to take a
credit for elective deferrals contributed to your 403(b)
account. See chapter 10, Retirement Savings Contri-
butions Credit (Saver's Credit), for more information.
Excluded. If an amount is excluded from your income,
it isn’t included in your total wages on your Form W-2. This
means that you don’t report the excluded amount on your
tax return.
Deducted. If an amount is deducted from your in-
come, it is included with your other wages on your Form
Publication 571 (1-2026) Chapter 1 403(b) Plan Basics 3
W-2. You report this amount on your tax return, but you are
allowed to subtract it when figuring the amount of income
on which you must pay tax.
Who Can Participate in a
403(b) Plan?
Any eligible employee can participate in a 403(b) plan.
Eligible employees. The following employees are eligi-
ble to participate in a 403(b) plan.
• Employees of tax-exempt organizations established
under section 501(c)(3). These organizations are usu-
ally referred to as “section 501(c)(3) organizations” or
simply “501(c)(3) organizations.”
• Employees of public school systems who are involved
in the day-to-day operations of a school.
• Employees of cooperative hospital service organiza-
tions.
• Civilian faculty and staff of the Uniformed Services
University of the Health Sciences.
• Employees of public school systems organized by In-
dian tribal governments who are involved in the
day-to-day operations of a school.
• Certain ministers (explained next).
Ministers. The following ministers are eligible employ-
ees for whom a 403(b) account can be established.
1. Ministers employed by section 501(c)(3) organiza-
tions.
2. Self-employed ministers. A self-employed minister is
treated as employed by a tax-exempt organization
that is an eligible employer.
3. Ministers (chaplains) who meet both of the following
requirements.
a. They are employed by organizations that aren’t
section 501(c)(3) organizations.
b. They function as ministers in their day-to-day pro-
fessional responsibilities with their employers.
Throughout this publication, the term “chaplain” will be
used to mean ministers described in the third category in
the list above.
Example. A minister employed as a chaplain by a
state-run prison and a chaplain in the U.S. Armed Forces
are eligible employees because their employers aren’t
section 501(c)(3) organizations and they are employed as
ministers.
Universal availability. Generally, all eligible employ-
ees (with certain exceptions) of an employer must be per-
mitted to make elective deferrals (including Roth elective
deferrals) if any employee of the employer may make elec-
tive deferrals. If your employer offers a 403(b) plan, you
should have received information about your eligibility to
participate.
Who Can Set up a 403(b)
Account?
You can’t set up your own 403(b) account. Only employers
can set up 403(b) accounts. A self-employed minister
can’t set up a 403(b) account for their own benefit. If you
are a self-employed minister, only the organization (de-
nomination) with which you are associated can set up an
account for your benefit.
How Can Contributions Be
Made to My 403(b) Account?
Generally, only your employer can make contributions to
your 403(b) account. However, some plans will allow you
to make after-tax contributions (defined below).
The following types of contributions can be made to
403(b) accounts.
1. Elective deferrals. These are contributions made un-
der a salary reduction agreement. This agreement al-
lows your employer to withhold money from your pay-
check to be contributed directly into a 403(b) account
for your benefit. Except for Roth contributions, you
don’t pay income tax on these contributions until you
withdraw them from the account. If your contributions
are Roth contributions, you pay taxes on your contri-
butions but any qualified distributions from your Roth
account are tax free.
2. Nonelective contributions. These are employer
contributions that aren’t made under a salary reduc-
tion agreement. Nonelective contributions include
matching contributions, discretionary contributions,
and mandatory contributions made by your employer.
Except for Roth nonelective contributions, you don't
pay income tax on these contributions until you with-
draw them from the account. If your nonelective con-
tributions are designated as Roth contributions, you
pay taxes on your contributions, but any qualified dis-
tributions from your Roth account are tax free.
3. After-tax contributions. These are contributions
(that aren’t Roth contributions) you make with funds
that you must include in income on your tax return. A
salary payment on which income tax has been with-
held is a source of these contributions. If your plan al-
lows you to make after-tax contributions, they aren’t
excluded from income and you can’t deduct them on
your tax return.
4. A combination of any of the three contribution types
listed above.
4 Chapter 1 403(b) Plan Basics Publication 571 (1-2026)
Self-employed minister. If you are a self-employed min-
ister, you are considered both an employee and an em-
ployer, and you can contribute to a retirement income ac-
count for your own benefit.
Do I Report Elective Deferrals
on My Tax Return?
Generally, you don’t report elective deferrals to your
403(b) account (except Roth contributions) on your tax re-
turn. Your employer will report elective deferrals on your
2025 Form W-2. Elective deferrals will be shown in box 12
with code E for pre-tax amounts and code BB for Roth
amounts, and the Retirement plan box will be checked in
box 13. If you are a self-employed minister or chaplain,
see the discussions next.
Designated Roth nonelective contributions that are allo-
cated to your account in 2025 will be reported on your
2025 Form 1099-R. Designated Roth nonelective contri-
butions will be reported in boxes 1 and 2a and code G will
be used in box 7.
Self-employed ministers. If you are a self-employed
minister, you must report the total contributions as a de-
duction on your tax return. Deduct your contributions on
line 16 of the 2025 Schedule 1 (Form 1040).
Chaplains. If you are a chaplain and your employer
doesn’t exclude contributions made to your 403(b) ac-
count from your earned income, you may be able to take a
deduction for those contributions on your tax return.
However, if your employer has agreed to exclude the
contributions from your earned income, you won’t be al-
lowed a deduction on your tax return.
If you can take a deduction, include your contributions
on line 24g of the 2025 Schedule 1 (Form 1040).
How Much Can Be Contributed
to My 403(b) Account?
There are limits on the amount of contributions that can be
made to your 403(b) account each year. If contributions
made to your 403(b) account are more than these contri-
bution limits, penalties may apply.
Chapters 2 through 6 provide information on how to de-
termine the amount that can be contributed to your 403(b)
account.
Worksheets are provided in chapter 9 to help you deter-
mine the maximum amount that can be contributed to your
403(b) account each year. Chapter 7, Excess Contribu-
tions, describes how to prevent excess contributions and
how to get an excess contribution corrected.
2.
Maximum Amount
Contributable (MAC)
Throughout this publication, the limit on the amount that
can be contributed to your 403(b) account for any year is
referred to as your “maximum amount contributable”
(MAC). This chapter:
• Introduces the components of your MAC,
• Tells you how to figure your MAC, and
• Tells you when to figure your MAC.
Components of Your MAC
Generally, before you can determine your MAC, you must
first figure the components of your MAC. The components
of your MAC are:
• The limit on annual additions (chapter 3), and
• The limit on elective deferrals (chapter 4).
How Do I Figure My MAC?
Generally, contributions to your 403(b) account are limited
to the lesser of:
• The limit on annual additions, or
• The limit on elective deferrals.
Depending upon the type of contributions made to your
403(b) account, only one of the limits may apply to you.
Which limit applies. Whether you must apply one or
both of the limits depends on the type of contributions
made to your 403(b) account during the year.
Elective deferrals only. If the only contributions made
to your 403(b) account during the year were elective defer-
rals made under a salary reduction agreement, you will
need to figure both of the limits. Your MAC is the lesser of
the two limits.
Nonelective contributions only. If the only contribu-
tions made to your 403(b) account during the year were
nonelective contributions (employer contributions not
made under a salary reduction agreement), you will only
need to figure the limit on annual additions. Your MAC is
the limit on annual additions.
Elective deferrals and nonelective contributions. If
the contributions made to your 403(b) account were a
combination of both elective deferrals made under a sal-
ary reduction agreement and nonelective contributions
(employer contributions not made under a salary
Publication 571 (1-2026) Chapter 2 Maximum Amount Contributable (MAC) 5
reduction agreement), you will need to figure both limits.
Your MAC is the limit on the annual additions.
Catch-up contributions. If you are age 50 or older,
you may be able to make additional catch-up contribu-
tions, which are explained in chapter 6.
You need to figure the limit on elective deferrals to de-
termine if you have excess elective deferrals, which are
explained in chapter 7.
Worksheets. Worksheets are available in chapter 9 to
help you figure your MAC.
When Should I Figure My
MAC?
At the beginning of 2026, you should refigure your 2025
MAC based on your actual compensation for 2025. This
will allow you to determine if the amount that has been
contributed to your 403(b) account for 2025 has exceeded
the allowable limits. In some cases, this will allow you to
avoid penalties and additional taxes. See chapter 7.
Generally, you should figure your MAC for the current
year at the beginning of each tax year using a conserva-
tive estimate of your compensation. If your compensation
changes during the year, you should refigure your MAC
based on a revised conservative estimate. By doing this,
you will be able to determine if contributions to your 403(b)
account can be increased or should be decreased for the
year.
3.
Limit on Annual Additions
The first component of your MAC is the limit on annual ad-
ditions. This is a limit on the total contributions (elective
deferrals, nonelective contributions, and after-tax contribu-
tions) that can be made to your 403(b) account. The limit
on annual additions is generally the lesser of:
• $70,000 for 2025 and $72,000 for 2026, or
• 100% of your includible compensation for your most
recent year of service.
Caution: More than one 403(b) account. If you contrib-
uted to more than one 403(b) account, you must combine
the contributions made to all 403(b) accounts maintained
by your employer. If you participate in more than one
403(b) plan maintained by different employers, you don’t
need to combine amounts for annual addition limits.
Ministers and church employees. If you are a minis-
ter or a church employee, you may be able to increase
your limit on annual additions or use different rules when
figuring your limit on annual additions. For more informa-
tion, see chapter 5.
Participation in a qualified plan. If you participated
in a 403(b) plan and a qualified plan, you must combine
contributions made to your 403(b) account with contribu-
tions to a qualified plan and simplified employee pensions
of all corporations, partnerships, and sole proprietorships
in which you have more than 50% control to determine the
total annual additions.
You can use Part I of Worksheet 1 in chapter 9 to figure
your limit on annual additions.
Includible Compensation for
Your Most Recent Year of
Service
Definition. Generally, includible compensation for your
most recent year of service is the amount of taxable wa-
ges and benefits you received from the employer that
maintained a 403(b) account for your benefit during your
most recent year of service.
When figuring your includible compensation for your
most recent year of service, keep in mind that your most
recent year of service may not be the same as your em-
ployer's most recent annual work period. This can happen
if your tax year isn’t the same as your employer's annual
work period.
When figuring includible compensation for your most
recent year of service, don’t mix compensation or service
of one employer with compensation or service of another
employer.
Most Recent Year of Service
Your most recent year of service is your last full year of
service, ending on the last day of your tax year that you
worked for the employer that maintained a 403(b) account
on your behalf.
Tax year different from employer's annual work pe-
riod. If your tax year isn’t the same as your employer's
annual work period, your most recent year of service is
made up of parts of at least two of your employer's annual
work periods.
Example. A professor who reports income on a calen-
dar-year basis is employed on a full-time basis by a uni-
versity that operates on an academic year (October
through May). To figure the includible compensation for
2025, the professor's most recent year of service is from
January through May 2025 and from October through De-
cember 2025.
Figuring Your Most Recent Year of Service
To figure your most recent year of service, begin by deter-
mining what is a full year of service for your position. A full
6 Chapter 3 Limit on Annual Additions Publication 571 (1-2026)
year of service is equal to full-time employment for your
employer's annual work period.
After identifying a full year of service, begin counting
the service you have provided for your employer starting
with the service provided in the current year.
Part-time or employed only part of the year. If you are
a part-time or a full-time employee who is employed for
only part of the year, your most recent year of service is
your service this year and your service for as many previ-
ous years as is necessary to total 1 full year of service. To
determine your most recent year of service, add the fol-
lowing periods of service.
• Your service during the year for which you are figuring
the limit on annual additions.
• Your service during your preceding tax years until the
total service equals 1 year of service or you have fig-
ured all of your service with the employer.
Example. You were employed on a full-time basis
from July through December 2023 (1/2 year of service),
July through December 2024 (1/2 year of service), and Oc-
tober through December 2025 (1/4 year of service). Your
most recent year of service for figuring your limit on annual
additions for 2025 is the total of your service during 2025
(1/4 year of service), your service during 2024 (1/2 year of
service), and your service during the months of October
through December 2023 (1/4 year of service).
Not yet employed for 1 year. If, at the close of the year,
you haven’t yet worked for your employer for 1 year (in-
cluding time you worked for the same employer in all ear-
lier years), use the period of time you have worked for the
employer as your most recent year of service.
Includible Compensation
After identifying your most recent year of service, the next
step is to identify the includible compensation associated
with that full year of service.
Includible compensation isn’t the same as income in-
cluded on your tax return. Compensation is a combination
of income and benefits received in exchange for services
provided to your employer.
Generally, includible compensation is the amount of in-
come and benefits:
• Received from the employer who maintains your
403(b) account, and
• It must be included in your income.
Includible compensation includes the following
amounts.
• Elective deferrals (employer's contributions made on
your behalf under a salary reduction agreement).
• Amounts contributed or deferred by your employer un-
der a section 125 cafeteria plan.
• Amounts contributed or deferred, at the election of the
employee, under an eligible section 457 nonqualified
deferred compensation plan (state or local govern-
ment or tax-exempt organization plan).
Note: For information about treating elective deferrals
under section 457 plans as Roth contributions, see
Pub. 575.
• Wages, salaries, and fees for personal services
earned with the employer maintaining your 403(b) ac-
count.
• Income otherwise excluded under the foreign earned
income exclusion.
• Pre-tax contributions (employer's contributions made
on your behalf according to your election) to a quali-
fied transportation fringe benefit plan.
Includible compensation does not include the following
items.
1. Your employer's contributions to your 403(b) account.
2. Compensation earned while your employer wasn’t an
eligible employer.
3. Your employer's contributions to a qualified plan that:
a. Are on your behalf, and
b. Are excludable from income.
4. The cost of incidental life insurance. See Cost of Inci-
dental Life Insurance, later.
Caution: If you are a church employee or a foreign
missionary, figure includible compensation using the rules
explained in chapter 5.
Contributions after retirement. Nonelective contribu-
tions may be made for an employee for up to 5 years after
retirement. These contributions would be based on includ-
ible compensation for the last year of service before retire-
ment.
Cost of Incidental Life Insurance
Includible compensation doesn’t include the cost of inci-
dental life insurance.
Caution: If all of your 403(b) accounts invest only in
mutual funds, then you have no incidental life insurance.
If you have an annuity contract, a portion of the cost of
that contract may be for incidental life insurance. If so, the
cost of the insurance is taxable to you in the year contrib-
uted and is considered part of your basis when distrib-
uted. Your employer will include the cost of your insurance
as taxable wages in box 1 of Form W-2.
Not all annuity contracts include life insurance. Contact
your plan administrator to determine if your contract in-
cludes incidental life insurance. If it does, you will need to
figure the cost of life insurance each year the policy is in
effect.
Figuring the cost of incidental life insurance. If you
have determined that part of the cost of your annuity
contract is for an incidental life insurance premium, you
Publication 571 (1-2026) Chapter 3 Limit on Annual Additions 7
will need to determine the amount of the premium and
subtract it from your includible compensation.
To determine the amount of the life insurance premi-
ums, you will need to know the following information.
• The value of your life insurance contract, which is the
amount payable upon your death.
• The cash value of your life insurance contract at the
end of the tax year.
• Your age on your birthday nearest the beginning of the
policy year.
• Your current life insurance protection under an ordi-
nary retirement income life insurance policy, which is
the amount payable upon your death minus the cash
value of the contract at the end of the year.
You can use Worksheet A in chapter 9 to determine the
cost of your incidental life insurance.
Example. Your new contract provides that your bene-
ficiary will receive $10,000 if you should die before retire-
ment. Your cash value in the contract at the end of the first
year is zero. Your current life insurance protection for the
first year is $10,000 ($10,000 − $0).
The cash value in the contract at the end of year 2 is
$1,000, and the current life insurance protection for the
second year is $9,000 ($10,000 – $1,000).
The 1-year cost of the protection can be calculated by
using Figure 3-1. The premium rate is determined based
on your age on your birthday nearest the beginning of the
policy year.
Figure 3-1. Table of 1-Year Term Premiums
for $1,000 Life Insurance Protection
Age Cost Age Cost Age Cost
0 . . . . $0.70 35 . . . $0.99 70 . . . $20.62
1 . . . . 0.41 36 . . . 1.01 71 . . . 22.72
2 . . . . 0.27 37 . . . 1.04 72 . . . 25.07
3 . . . . 0.19 38 . . . 1.06 73 . . . 27.57
4 . . . . 0.13 39 . . . 1.07 74 . . . 30.18
5 . . . . 0.13 40 . . . 1.10 75 . . . 33.05
6 . . . . 0.14 41 . . . 1.13 76 . . . 36.33
7 . . . . 0.15 42 . . . 1.20 77 . . . 40.17
8 . . . . 0.16 43 . . . 1.29 78 . . . 44.33
9 . . . . 0.16 44 . . . 1.40 79 . . . 49.23
10 . . . 0.16 45 . . . 1.53 80 . . . 54.56
11 . . . 0.19 46 . . . 1.67 81 . . . 60.51
12 . . . 0.24 47 . . . 1.83 82 . . . 66.74
13 . . . 0.28 48 . . . 1.98 83 . . . 73.07
14 . . . 0.33 49 . . . 2.13 84 . . . 80.35
15 . . . 0.38 50 . . . 2.30 85 . . . 88.76
16 . . . 0.52 51 . . . 2.52 86 . . . 99.16
17 . . . 0.57 52 . . . 2.81 87 . . . 110.40
18 . . . 0.59 53 . . . 3.20 88 . . . 121.85
19 . . . 0.61 54 . . . 3.65 89 . . . 133.40
20 . . . 0.62 55 . . . 4.15 90 . . . 144.30
21 . . . 0.62 56 . . . 4.68 91 . . . 155.80
22 . . . 0.64 57 . . . 5.20 92 . . . 168.75
23 . . . 0.66 58 . . . 5.66 93 . . . 186.44
24 . . . 0.68 59 . . . 6.06 94 . . . 206.70
25 . . . 0.71 60 . . . 6.51 95 . . . 228.35
26 . . . 0.73 61 . . . 7.11 96 . . . 250.01
27 . . . 0.76 62 . . . 7.96 97 . . . 265.09
28 . . . 0.80 63 . . . 9.08 98 . . . 270.11
29 . . . 0.83 64 . . . 10.41 99 . . . 281.05
30 . . . 0.87 65 . . . 11.90
31 . . . 0.90 66 . . . 13.51
32 . . . 0.93 67 . . . 15.20
33 . . . 0.96 68 . . . 16.92
34 . . . 0.98 69 . . . 18.70
Caution: If the current published premium rates per
$1,000 of insurance protection charged by an insurer for
individual 1-year term life insurance premiums available to
all standard risks are lower than those in the preceding ta-
ble, you can use the lower rates for figuring the cost of in-
surance in connection with individual policies issued by
the same insurer.
Example 1. An employee, age 44, and the employer
enter into a 403(b) plan that will provide the employee with
a $500 a month annuity upon retirement at age 65. The
agreement also provides that if the employee should die
before retirement, the beneficiary will receive the greater
of $20,000 or the cash surrender value in the life insur-
ance contract. Using the facts presented, we can deter-
mine the cost of the employee’s life insurance protection
as shown in Table 3-1.
The employer has included $28 for the cost of the life
insurance protection in the employee’s current-year in-
come. When figuring includible compensation for this
year, the employee will subtract $28.
8 Chapter 3 Limit on Annual Additions Publication 571 (1-2026)
Worksheet A. Cost of Incidental
Life Insurance
Note: Use this worksheet to figure the cost of incidental
life insurance included in your annuity contract. This
amount will be used to figure includible compensation for
your most recent year of service.
Table 3-1.
1. Enter the value of the contract (amount
payable upon your death) . . . . . . . . . . . 1. $20,000.00
2. Enter the cash value in the contract at the
end of the year . . . . . . . . . . . . . . . . . . 2. 0.00
3. Subtract line 2 from line 1. This is the value
of your current life insurance protection . . . 3. $20,000.00
4. Enter your age on your birthday nearest the
beginning of the policy year . . . . . . . . . . 4. 44
5. Enter the 1-year term premium for $1,000
of life insurance based on your age. (From
Figure 3-1) . . . . . . . . . . . . . . . . . . . . . 5. $1.40
6. Divide line 3 by $1,000 . . . . . . . . . . . . . 6. 20
7. Multiply line 6 by line 5. This is the cost of
your incidental life insurance . . . . . . . . . . 7. $28.00
Example 2. The employee’s cash value in the con-
tract at the end of the second year is $1,000. In year 2, the
cost of the employee’s life insurance is figured as shown in
Table 3-2.
In year 2, the employer will include $29.07 in the em-
ployee’s current-year income. The employee will subtract
this amount when figuring the includible compensation.
Worksheet A. Cost of Incidental
Life Insurance
Note: Use this worksheet to figure the cost of incidental
life insurance included in your annuity contract. This
amount will be used to figure includible compensation for
your most recent year of service.
Table 3-2.
1. Enter the value of the contract (amount
payable upon your death) . . . . . . . . . . . 1. $20,000.00
2. Enter the cash value in the contract at the
end of the year . . . . . . . . . . . . . . . . . . 2. $1,000.00
3. Subtract line 2 from line 1. This is the value
of your current life insurance protection . . 3. $19,000.00
4. Enter your age on your birthday nearest
the beginning of the policy year . . . . . . . 4. 45
5. Enter the 1-year term premium for $1,000
of life insurance based on your age. (From
Figure 3-1) . . . . . . . . . . . . . . . . . . . . 5. $1.53
6. Divide line 3 by $1,000 . . . . . . . . . . . . . 6. 19
7. Multiply line 6 by line 5. This is the cost of
your incidental life insurance . . . . . . . . . 7. $29.07
Figuring Includible Compensation for Your
Most Recent Year of Service
You can use Worksheet B in chapter 9 to determine your
includible compensation for your most recent year of serv-
ice.
You can use Worksheet Bin chapter 9 to determine your
includible compensation for your most recent year of serv-
ice.
Example. Max has been periodically working full-time
for a local hospital since September 2023. Max needs to
figure the limit on annual additions for 2026. The hospital's
normal annual work period for employees in Max's general
type of work runs from January to December.
During the periods that Max was employed with the
hospital, the hospital was always eligible to provide a
403(b) plan to employees. Additionally, the hospital never
provided the employees with a 457 deferred compensa-
tion plan, a transportation fringe benefit plan, or a cafeteria
plan.
Max has never worked abroad and there is no life insur-
ance provided under the plan.
Table 3-3 shows the service Max provided to the em-
ployer, compensation for the periods worked, elective de-
ferrals, and taxable wages.
Max’s Compensation
Note: This table shows information Max will use to figure
includible compensation for the most recent year of
service.
Table 3-3.
Year Years of
Service
Taxable
Wages
Elective
Deferrals
2026 6/12 of
a year $42,000 $2,000
2025 4/12 of
a year $16,000 $1,650
2024 4/12 of
a year $16,000 $1,650
Before figuring the limit on annual additions, Max must
figure includible compensation for the most recent year of
service.
Because Max isn’t planning to work the entire 2026
year, Max’s most recent year of service will include the
time planning to work in 2026 plus time worked in the pre-
ceding 3 years until the time worked for the hospital totals
1 year. If the total time worked is less than 1 year, Max will
treat it as if it were 1 year. Max figures the most recent
year of service shown in the following list.
• Time Max will work in 2026 is 6/12 of a year.
• Time worked in 2025 is 4/12 of a year. All of this time
will be used to determine Max's most recent year of
service.
• Time worked in 2024 is 4/12 of a year. Max only needs
2 months of the 4 months worked in 2024 to have
enough time to total 1 full year. Because Max needs
only 1/2 of the actual time worked, Max will use only 1/2
of income earned during that period to figure wages
that will be used in figuring the includible compensa-
tion.
Publication 571 (1-2026) Chapter 3 Limit on Annual Additions 9
Using the information provided in Table 3-3, wages for
Max's most recent year of service are $66,000 ($42,000 +
$16,000 + $8,000). Max’s includible compensation for the
most recent year of service is figured as shown in Ta-
ble 3-4.
After figuring the includible compensation, Max deter-
mines the limit on annual additions for 2026 to be
$72,000, the lesser of the includible compensation,
$70,475 (Table 3-4), and the maximum amount of
$72,000.
Worksheet B. Includible Compensation for Your Most Recent Year of Service1
Note: Use this worksheet to figure includible compensation for your most recent year of service.
1. Enter your includible wages from the employer maintaining your 403(b) account for your most
recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. $66,000
2. Enter elective deferrals excluded from your gross income for your most recent year of
service2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 4,4753
3. Enter amounts contributed or deferred by your employer under a cafeteria plan for your most
recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. -0-
4. Enter amounts contributed or deferred by your employer according to your election to your 457
account (a nonqualified plan of a state or local government or of a tax-exempt organization) for
your most recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. -0-
5. Enter pre-tax contributions (employer's contributions made on your behalf according to your
election) to a qualified transportation fringe benefit plan for your most recent year of
service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. -0-
6. Enter your foreign earned income exclusion for your most recent year of service . . . . . . . . . . . . . 6. -0-
7. Add lines 1, 2, 3, 4, 5, and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. 70,475
8. Enter the cost of incidental life insurance that is part of your annuity contract for your most recent
year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. -0-
9. Enter compensation that was both:
• Earned during your most recent year of service, and
• Earned while your employer wasn’t qualified to maintain a 403(b) plan . . . . . . . . . . . . . . . . . . 9. -0-
10. Add lines 8 and 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. -0-
11. Subtract line 10 from line 7. This is your includible compensation for your most recent year of
service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. 70,475
1 Use estimated amounts if figuring includible compensation before the end of the year.
2 Elective deferrals made to a designated Roth account aren’t excluded from your gross income and shouldn’t be included on this line.
3 $4,475 ($2,000 + $1,650 + $825).
Table 3-4.
10 Chapter 3 Limit on Annual Additions Publication 571 (1-2026)
4.
Limit on Elective
Deferrals
The second and final component of your MAC is the limit
on elective deferrals. This is a limit on the amount of con-
tributions that can be made to your account through a sal-
ary reduction agreement.
A salary reduction agreement is an agreement between
you and your employer that allows for a portion of your
compensation to be directly invested in a 403(b) account
on your behalf. You can enter into more than one salary
reduction agreement during a year.
Caution: More than one 403(b) account. If, for any
year, elective deferrals are contributed to more than one
403(b) account for you (whether or not with the same em-
ployer), you must combine all the elective deferrals to de-
termine whether the total is more than the limit for that
year.
403(b) plan and another retirement plan. If, during
the year, contributions in the form of elective deferrals are
made to other retirement plans on your behalf, you must
combine all of the elective deferrals to determine if they
are more than your limit on elective deferrals. The limit on
elective deferrals applies to amounts contributed to:
• 401(k) plans, to the extent excluded from income;
• Roth contribution programs;
• Section 501(c)(18) plans, to the extent excluded from
income;
• Savings incentive match plan for employees (SIMPLE)
plans;
• Salary reduction simplified employee pension (SAR-
SEP) plans; and
• All 403(b) plans.
Roth contribution program. Your 403(b) plan may allow
you to designate all or a portion of your elective deferrals
as Roth contributions. Elective deferrals designated as
Roth contributions must be maintained in a separate Roth
account and aren’t excludable from your gross income.
The maximum amount of contributions allowed under a
Roth contribution program is your limit on elective defer-
rals, less your elective deferrals not designated as Roth
contributions. For more information on the Roth contribu-
tion program, see Pub. 560, Retirement Plans for Small
Business.
Excess elective deferrals. If the amount contributed
is more than the allowable limit, you must include the ex-
cess that isn’t a Roth contribution in your gross income for
the year contributed.
General Limit
Under the general limit on elective deferrals, the most that
can be contributed to your 403(b) account through a sal-
ary reduction agreement is $23,500 for 2025 and $24,500
for 2026. This limit applies without regard to community
property laws.
15-Year Rule
If you have at least 15 years of service with an educational
organization (such as a public or private school), hospital,
home health service agency, health and welfare service
agency, church, or convention or association of churches
(or associated organization) and it is allowed by the terms
of the plan document, the limit on elective deferrals to your
403(b) account is increased by the least of:
1. $3,000;
2. $15,000, reduced by the sum of:
a. The additional pre-tax elective deferrals made in
prior years because of this rule, plus
b. The aggregate amount of designated Roth contri-
butions permitted for prior years because of this
rule; or
3. $5,000 times the number of your years of service for
the organization, minus the total elective deferrals
made by your employer on your behalf for earlier
years.
If you qualify for the 15-year rule (sometimes referred to
as the “special section 403(b) catch-up” or the
“years-of-service catch-up”), your elective deferrals under
this limit can be as high as $26,500 for 2025 and $27,500
for 2026.
To determine whether you have 15 years of service with
your employer, see Years of Service next.
Years of Service
To determine if you are eligible for the increased limit on
elective deferrals, you will first need to figure your years of
service. How you figure your years of service depends on
whether you were a full-time or a part-time employee,
whether you worked for the full year or only part of the
year, and whether you have worked for your employer for
an entire year.
You must figure years of service for each year during
which you worked for the employer who is maintaining
your 403(b) account.
If more than one employer maintains a 403(b) account
for you in the same year, you must figure years of service
separately for each employer.
For purposes of the 15-year rule, years of service are
figured through the year for which the calculation is being
Publication 571 (1-2026) Chapter 4 Limit on Elective Deferrals 11
made. For example, to determine the limit for 2024, you
count years of service through 2025.
Definition
Your years of service are the total number of years you
have worked as a full-time employee for the employer
maintaining your 403(b) account as of the end of the year.
Figuring Your Years of Service
Take the following rules into account when figuring your
years of service.
Status of employer. Your years of service include only
periods during which your employer was an eligible em-
ployer. Your plan administrator can tell you whether or not
your employer was qualified during all your periods of
service.
Service with one employer. Generally, you can’t count
service for any employer other than the one who maintains
your 403(b) account.
Church employee. If you are a church employee, treat
all of your years of service with related church organiza-
tions as years of service with the same employer. For
more information about church employees, see chapter 5.
Self-employed ministers. If you are a self-employed
minister, your years of service include full and part years
in which you have been treated as employed by a tax-ex-
empt organization that is an eligible employer.
Total years of service. When figuring prior years of
service, figure each year individually and then add the in-
dividual years of service to determine your total years of
service.
Example. The annual work period for full-time teach-
ers employed by ABC Public Schools is September
through December and February through May. A teacher
began working with ABC Public Schools in September
2021. The teacher has always worked full-time for each
annual work period. At the end of 2025, the teacher had
4.5 years of service with ABC Public Schools, as shown in
Table 4-1.
Teacher's Years of Service
Note: This table shows how the teacher figures the years
of service, as explained in the previous example.
Table 4-1.
Year Period Worked Portion of Work
Period Years of Service
2021 Sept.–Dec. 0.5 year 0.5 year
2022 Feb.–May 0.5 year 1 year
Sept.–Dec. 0.5 year
2023 Feb.–May 0.5 year 1 year
Sept.–Dec. 0.5 year
2024 Feb.–May 0.5 year 1 year
Sept.–Dec. 0.5 year
2025 Feb.–May 0.5 year 1 year
Sept.–Dec. 0.5 year
Total years of service 4.5 years
Full-time or part-time. To figure your years of service,
you must analyze each year individually and determine
whether you worked full-time for the full year or something
other than full-time. When determining whether you
worked full-time or something other than full-time, use
your employer's annual work period as the standard.
Employer's annual work period. Your employer's an-
nual work period is the usual amount of time an individual
working full-time in a specific position is required to work.
Generally, this period of time is expressed in days, weeks,
months, or semesters, and can span 2 calendar years.
Note: You can’t accumulate more than 1 year of serv-
ice in a 12-month period.
Example. All full-time teachers at ABC Public Schools
are required to work both the September through Decem-
ber semester and the February through May semester.
Therefore, the annual work period for full-time teachers
employed by ABC Public Schools is September through
December and February through May. Teachers at ABC
Public Schools who work both semesters in the same cal-
endar year are considered working a full year of service in
that calendar year.
Full-Time Employee for the Full Year
Count each full year during which you were employed
full-time as 1 year of service. In determining whether you
were employed full-time, compare the amount of work you
were required to perform with the amount of work normally
required of others who held the same position with the
same employer and who generally received most of their
pay from the position.
How to compare. You can use any method that reasona-
bly and accurately reflects the amount of work required.
For example, if you are a teacher, you can use the number
of hours of classroom instruction as a measure of the
amount of work required.
12 Chapter 4 Limit on Elective Deferrals Publication 571 (1-2026)
In determining whether positions with the same em-
ployer are the same, consider all of the facts and circum-
stances concerning the positions, including the work per-
formed, the methods by which pay is determined, and the
descriptions (or titles) of the positions.
Example. An assistant professor employed in the Eng-
lish department of a university will be considered a
full-time employee if the amount of work that an assistant
professor is required to perform is the same as the amount
of work normally required of assistant professors of Eng-
lish at that university who get most of their pay from that
position.
If no one else works for your employer in the same posi-
tion, compare your work with the work normally required of
others who held the same position with similar employers
or similar positions with your employer.
Full year of service. A full year of service for a particular
position means the usual annual work period of anyone
employed full-time in that general type of work at that
place of employment.
Example. If a doctor works for a hospital 12 months of
a year except for a 1-month vacation, the doctor will be
considered as employed for a full year if the other doctors
at that hospital also work 11 months of the year with a
1-month vacation. Similarly, if the usual annual work pe-
riod at a university consists of the fall and spring semes-
ters, an instructor at that university who teaches these se-
mesters will be considered as working a full year.
Other Than Full-Time for the Full Year
If, during any year, you were employed full-time for only
part of your employer's annual work period, part-time for
the entire annual work period, or part-time for only part of
the work period, your year of service for that year is a frac-
tion of your employer's annual work period.
Full-time for part of the year. If, during a year, you were
employed full-time for only part of your employer's annual
work period, figure the fraction for that year as follows.
• The numerator (top number) is the number of weeks,
months, or semesters you were a full-time employee.
• The denominator (bottom number) is the number of
weeks, months, or semesters considered the normal
annual work period for the position.
Example. An instructor was employed full-time by a lo-
cal college for the 4 months of the 2025 spring semester
(February 2025 through May 2025). The annual work pe-
riod for the college is 8 months (February through May
and July through October). Given these facts, the instruc-
tor was employed full-time for part of the annual work pe-
riod and provided 1/2 of a year of service. The instructor’s
years of service computation for 2025 is as follows.
Number of months worked
=
=
Number of months in annual work
period
8 2
Part-time for the full year. If, during a year, you were
employed part-time for the employer's entire annual work
period, you figure the fraction for that year as follows.
• The numerator (top number) is the number of hours or
days you worked.
• The denominator (bottom number) is the number of
hours or days normally required of someone holding
the same position who works full-time.
Example. Alex teaches one course at a local medical
school 3 hours per week for 2 semesters. Other faculty
members at the same school teach 9 hours per week for 2
semesters. The annual work period of the medical school
is 2 semesters. An instructor teaching 9 hours a week for
2 semesters is considered a full-time employee. Given
these facts, Alex has worked part-time for a full annual
work period. Alex has completed 1/3 of a year of service,
figured as shown below.
Number of hours worked per week
=
=
Number of hours per week considered
full-time
9 3
Part-time for part of the year. If, during any year, you
were employed part-time for only part of your employer's
annual work period, you figure your fraction for that year
by multiplying two fractions.
Figure the first fraction as though you had worked
full-time for part of the annual work period. The fraction is
as follows.
• The numerator (top number) is the number of weeks,
months, or semesters you were a full-time employee.
• The denominator (bottom number) is the number of
weeks, months, or semesters considered the normal
annual work period for the position.
Figure the second fraction as though you had worked
part-time for the entire annual work period. The fraction is
as follows.
• The numerator (top number) is the number of hours or
days you worked.
• The denominator (bottom number) is the number of
hours or days normally required of someone holding
the same position who works full-time.
Once you have figured these two fractions, multiply
them together to determine the fraction representing your
partial year of service for the year.
Example. An attorney teaches a course 3 hours per
week for 1 semester at a law school. The annual work pe-
riod for teachers at the school is 2 semesters. All full-time
instructors at the school are required to teach 12 hours
per week. Based on these facts, the attorney is employed
part-time for part of the annual work period. The attorney’s
year of service for this year is determined by multiplying
two fractions. The computation is as follows.
Publication 571 (1-2026) Chapter 4 Limit on Elective Deferrals 13
Attorney’s first fraction
Number of semesters worked
=
Number of semesters in annual work period 2
Attorney's second fraction
Number of hours worked per week
=
=
Number of hours per week considered
full-time
12 4
The attorney would multiply these fractions to obtain
the fractional year of service.
x
=
2 4 8
Figuring the Limit on Elective
Deferrals
You can use Part II of Worksheet 1 in chapter 9 to figure
the limit on elective deferrals.
Example
Max has figured the limit on annual additions. The only
other component needed before Max can determine his
MAC for 2026 is the limit on elective deferrals.
Figuring Max's limit on elective deferrals. Max has
been employed with the current employer for less than 15
years. Max isn’t eligible for the special 15-year increase.
Therefore, the limit on elective deferrals for 2026 is
$24,500, as shown in Table 4-2.
Max's employer won’t make any nonelective contribu-
tions to the 403(b) account and Max won’t make any af-
ter-tax contributions. Additionally, Max's employer doesn’t
offer a Roth contribution program.
Figuring Max's MAC
Max has determined that the limit on annual additions for
2026 is $72,000 and the limit on elective deferrals is
$24,500. Because elective deferrals are the only contribu-
tions made to Max's account, the maximum amount that
can be contributed to a 403(b) account on Max's behalf in
2026 is $24,500, the lesser of both limits.
14 Chapter 4 Limit on Elective Deferrals Publication 571 (1-2026)
Worksheet 1. Maximum Amount Contributable (MAC)
Note: Use this worksheet to figure your MAC.
Table 4-2.
Part I. Limit on Annual Additions
1. Enter your includible compensation for your most recent year of service . . . . . . . . . . . . . . . . . . 1. $70,475
2. Maximum:
• For 2025, enter $70,000.
• For 2026, enter $72,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 72,000
3. Enter the lesser of line 1 or line 2. This is your limit on annual additions . . . . . . . . . . . . . . . . . . . 3. 72,000
Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3
on line 18.
Part II. Limit on Elective Deferrals
4. Maximum contribution:
• For 2025, enter $23,500.
• For 2026, enter $24,500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 24,500
Note: If you have at least 15 years of service with a qualifying organization, complete lines 5
through 17. If not, enter zero (-0-) on line 16 and go to line 17.
5. Amount per year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. 5,000
6. Enter your years of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Multiply line 5 by line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter the total of all elective deferrals made for you by the qualifying organization for prior
years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Subtract line 8 from line 7. If zero or less, enter zero (-0-) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. -0-
10. Maximum increase in limit for long service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. 15,000
11. Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year
rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the aggregate amount of all designated Roth contributions permitted for prior years under
the 15-year rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Add lines 11 and 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Subtract line 13 from line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Maximum additional contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. 3,000
16. Enter the least of line 9, line 14, or line 15. This is your increase in the limit for long service . . . . . 16. -0-
17. Add lines 4 and 16. This is your limit on elective deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17. 24,500
Part III. Maximum Amount Contributable
18. • If you had only nonelective contributions, enter the amount from line 3. This is your MAC.
• If you had only elective deferrals, enter the lesser of line 3 or line 17. This is your MAC.
• If you had both elective deferrals and nonelective contributions, enter the amount from line 3.
This is your MAC. (Use the amount on line 17 to determine if you have excess elective
deferrals as explained in chapter 7.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18. 24,500
Publication 571 (1-2026) Chapter 4 Limit on Elective Deferrals 15
5.
Ministers and Church
Employees
Self-employed ministers and church employees who par-
ticipate in 403(b) plans generally follow the same rules as
other 403(b) plan participants.
This means that if you are a self-employed minister or a
church employee, your MAC is generally the lesser of:
• Your limit on annual additions, or
• Your limit on elective deferrals.
For most ministers and church employees, the limit on an-
nual additions is figured without any changes. This means
that if you are a minister or church employee, your limit on
annual additions is generally the lesser of:
• $70,000 for 2025 and $72,000 for 2026, or
• Your includible compensation for your most recent
year of service.
Although, in general, the same limit applies, church em-
ployees can choose an alternative limit and there are
changes in how church employees, foreign missionaries,
and self-employed ministers figure includible compensa-
tion for the most recent year of service. This chapter will
explain the alternative limit and the changes.
Who is a church employee? A church employee is any-
one who is an employee of a church or a convention or as-
sociation of churches, including an employee of a tax-ex-
empt organization controlled by or associated with a
church or a convention or association of churches.
Alternative Limit for Church
Employees
If you are a church employee, you can choose to use
$10,000 a year as your limit on annual additions, even if
your annual additions figured under the general rule are
less.
Total contributions over your lifetime under this choice
can’t be more than $40,000.
Changes to Includible
Compensation for Most Recent
Year of Service
There are two types of changes in determining includible
compensation for the most recent year of service. They
are:
• Changes in how the includible compensation of for-
eign missionaries and self-employed ministers is fig-
ured, and
• A change to the years that are counted when figuring
the most recent year of service for church employees
and self-employed ministers.
Changes to Includible Compensation
Includible compensation is figured differently for foreign
missionaries and self-employed ministers.
Foreign missionary. If you are a foreign missionary, your
includible compensation includes foreign earned income
that may otherwise be excludable from your gross income
under section 911.
If you are a foreign missionary, and your adjusted gross
income is $17,000 or less, contributions to your 403(b) ac-
count won’t be treated as exceeding the limit on annual
additions if the contributions aren’t in excess of $3,000.
You are a foreign missionary if you are either a layper-
son or a duly ordained, commissioned, or licensed minis-
ter of a church and you meet both of the following require-
ments.
• You are an employee of a church or convention or as-
sociation of churches.
• You are performing services for the church outside the
United States.
Self-employed minister. If you are a self-employed min-
ister, you are treated as an employee of a tax-exempt or-
ganization that is an eligible employer. Your includible
compensation is your net earnings from your ministry mi-
nus the contributions made to the retirement plan on your
behalf and the deductible portion of your self-employment
tax.
Changes to Years of Service
Generally, only service with the employer who maintains
your 403(b) account can be counted when figuring your
limit on annual additions.
Church employee. If you are a church employee, treat all
of your years of service as an employee of a church or a
convention or association of churches as years of service
with one employer.
16 Chapter 5 Ministers and Church Employees Publication 571 (1-2026)
Self-employed minister. If you are a self-employed min-
ister, your years of service include full and part years dur-
ing which you were self-employed.
6.
Catch-up Contributions
The most that can be contributed to your 403(b) account
is the lesser of your limit on annual additions or your limit
on elective deferrals.
If you will be age 50 or older by the end of the year, you
may also be able to make additional catch-up contribu-
tions. These additional contributions can’t be made with
after-tax employee contributions.
You are eligible to make catch-up contributions if:
• You will have reached age 50 by the end of the year,
• Your employer's plan document allows for catch-up
contributions, and
• The maximum amount of elective deferrals that can be
made to your 403(b) account has been made for the
plan year.
The maximum amount of catch-up contributions is the
lesser of:
• $x,xxx for 2025 and 2026; or
• The excess of your compensation for the year, over
the elective deferrals that aren’t catch-up contribu-
tions.
Starting in 2025, eligible participants who reach the age of
60, 61, 62, or 63 during the tax year may be entitled for
further catch-up contributions. Their maximum amount of
catch-up contributions is 150% of the applicable dol-
lar-catch-up limit, which is $11,250 for 2025.
Figuring catch-up contributions. When figuring allowa-
ble catch-up contributions, combine all catch-up contribu-
tions made by your employer on your behalf to the follow-
ing plans.
• Qualified retirement plans. (To determine if your plan
is a qualified plan, ask your plan administrator.)
• 403(b) plans.
• SARSEP plans.
• SIMPLE plans.
The total amount of the catch-up contributions on your
behalf to all plans maintained by your employer can’t be
more than the annual limit. The limit is $x,xxx for 2025 and
2026 if you reach the age of 50 or over but not the age of
60, 61, 62, or 63 during the tax year. If you reach the age
of 60, 61, 62, or 63 during the tax year, then your limit is
$11,250.
Caution: If you are eligible for both the 15-year rule in-
crease in elective deferrals and the age 50 catch-up, allo-
cate amounts first under the 15-year rule and next as an
age 50 catch-up.
Tip: Catch-up contributions aren’t counted against
your MAC. Therefore, the maximum amount that you are
allowed to have contributed to your 403(b) account is your
MAC plus your allowable catch-up contributions.
You can use Worksheet C in chapter 9 to figure your limit
on catch-up contributions.
7.
Excess Contributions
If your actual contributions (not including catch-up contri-
butions) are greater than your MAC, you have an excess
contribution. Excess contributions can result in income
tax, additional taxes, and penalties. The effect of excess
contributions depends on the type of excess contribution.
This chapter discusses excess contributions to your
403(b) account.
How Do I Know if I Have
Excess Contributions?
At the end of the year or the beginning of the next year,
you should refigure your MAC based on your actual com-
pensation and actual contributions made to your account.
If the actual contributions (not including catch-up contri-
butions) to your account are greater than your MAC, you
have excess contributions. If, at any time during the year,
your employment status or your compensation changes,
you should refigure your MAC using a revised estimate of
compensation to prevent excess contributions.
What Happens if I Have Excess
Contributions?
Certain excess contributions in a 403(b) account can be
corrected. The effect of an excess 403(b) contribution will
depend on the type of excess contribution.
Types of excess contributions. If, after checking your
actual contributions, you determine that you have an ex-
cess, the first thing is to identify the type of excess that
you have. Excess contributions to a 403(b) account are
categorized as either an:
• Excess annual addition, or
Publication 571 (1-2026) Chapter 6 Catch-up Contributions 17
• Excess elective deferral.
Excess Annual Addition
An excess annual addition is a contribution (not including
catch-up contributions) that is more than your limit on an-
nual additions. To determine your limit on annual addi-
tions, see chapter 3 (chapter 5 for ministers or church em-
ployees).
In the year that your contributions are more than your
limit on annual additions, the excess amount will be inclu-
ded in your income.
Excise Tax
If your 403(b) account is a custodial account, and you ex-
ceed your limit on annual additions, you may be subject to
a 6% excise tax on the excess contribution. The excise tax
doesn’t apply to funds in an annuity contract or a retire-
ment income account, or to excess deferrals.
You must pay the excise tax each year in which there
are excess contributions in your account. Excess contribu-
tions can be corrected by contributing less than the appli-
cable limit in later years or by making permissible distribu-
tions. See chapter 8 for a discussion on permissible
distributions.
You can’t deduct the excise tax.
Reporting requirement. You must file Form 5330 if there
has been an excess contribution to a custodial account
and that excess hasn’t been corrected.
Excess Elective Deferral
An excess elective deferral is the amount that is more than
your limit on elective deferrals. To determine your limit on
elective deferrals, see chapter 4.
Your employer's 403(b) plan may contain language per-
mitting it to distribute excess deferrals. If so, it may require
that in order to get a distribution of excess deferrals, you
either notify the plan of the amount of excess deferrals or
designate a distribution as an excess deferral. The plan
may require that the notification or designation be in writ-
ing and may require that you certify or otherwise establish
that the designated amount is an excess deferral. A plan
isn’t required to permit distribution of excess deferrals.
Correction of excess deferrals during year. If you
have excess deferrals for a year, a corrective distribution
may be made only if both of the following conditions are
satisfied.
• The plan and either you or your employer designate
the distribution as an excess deferral to the extent you
have excess deferrals for the year.
• The correcting distribution is made after the date on
which the excess deferral was made.
Correction of excess deferrals after the year. If you
have excess deferrals for a year, you may receive a cor-
recting distribution of the excess deferral no later than
April 15 of the following year. The plan can distribute the
excess deferral (and any income allocable to the excess)
no later than April 15 of the year following the year the ex-
cess deferral was made.
Note: When April 15 falls on a Saturday, Sunday, or le-
gal holiday, a return is considered timely filed if filed on the
next succeeding day that isn’t a Saturday, Sunday, or legal
holiday.
Tax treatment of excess deferrals not attributable to
Roth contributions. If the excess deferral is distributed
by April 15, it is included in your income in the year con-
tributed and the earnings on the excess deferral will be
taxed in the year distributed.
Note: When April 15 falls on a Saturday, Sunday, or le-
gal holiday, a return is considered timely filed if filed on the
next succeeding day that isn’t a Saturday, Sunday, or legal
holiday.
Tax treatment of excess deferrals attributable to Roth
contributions. For these rules, see Regulations section
1.402(g)-1(e).
8.
Distributions and
Rollovers
Distributions
Permissible distributions. Generally, a distribution can’t
be made from a 403(b) account until the employee:
• Reaches age 591/2;
• Has a severance from employment;
• Dies;
• Becomes disabled;
• In the case of elective deferrals, encounters financial
hardship;
• Has a qualified reservist distribution;
• Has a qualified birth or adoption distribution;
• Has certain distributions of lifetime income invest-
ments;
• Has an emergency personal expenses distribution;
• Has a domestic abuse distribution; or
• Has a qualified disaster recovery distribution.
18 Chapter 8 Distributions and Rollovers Publication 571 (1-2026)
In most cases, the payments you receive or that are
made available to you under your 403(b) account are taxa-
ble in full as ordinary income. In general, the same tax
rules apply to distributions from 403(b) plans that apply to
distributions from other retirement plans. These rules are
explained in Pub. 575. Pub. 575 also discusses the addi-
tional tax on early distributions from retirement plans.
Retired public safety officers. If you are an eligible re-
tired public safety officer, you can exclude from your gross
income distributions of up to $3,000 made from your
403(b) plan that are used to pay the premiums for cover-
age by an accident or health plan, or a long-term care in-
surance contract. The premiums can be for you, your
spouse, or your dependents. The distribution can be
made directly from the plan to the provider of the accident
or health plan or long-term care insurance contract, or the
distribution can be made to you to pay to the provider of
the accident or health plan or long-term care insurance
contract.
A public safety officer is a law enforcement officer,
fire fighter, chaplain, or member of a rescue squad or am-
bulance crew.
For additional information, see Pub. 575.
Distribution for active reservist. The 10% additional
tax for early withdrawals won’t apply to a qualified reserv-
ist distribution attributable to elective deferrals from a
403(b) plan. A qualified reservist distribution is a distribu-
tion that is made:
• To an individual who is a reservist or national guards-
man and who was ordered or called to active duty for
a period in excess of 179 days or for an indefinite pe-
riod, and
• During the period beginning on the date of the order or
call to duty and ending at the close of the active duty
period.
Minimum Required Distributions
You must receive all, or at least a certain minimum, of your
interest accruing after 1986 in the 403(b) plan by April 1 of
the calendar year following the later of the calendar year in
which you reach age 73 (if you reach age 72 after Decem-
ber 31, 2022), or the calendar year in which you retire.
Tip: Check with your employer, plan administrator, or
provider to find out whether this rule also applies to
pre-1987 accruals. If not, a minimum amount of these ac-
cruals must begin to be distributed by the later of the end
of the calendar year in which you reach age 75 or April 1
of the calendar year following retirement.
For each year thereafter, the minimum distribution must
be made by the last day of the year. If you don’t receive
the required minimum distribution, you are subject to a
nondeductible 25% (or 10% if corrected by a specified
time) excise tax on the difference between the required
minimum distribution and the amount actually distributed.
No Special 10-Year Tax Option
A distribution from a 403(b) plan doesn’t qualify as a
lump-sum distribution. This means you can’t use the spe-
cial 10-year tax option to figure the taxable portion of a
403(b) distribution. For more information, see Pub. 575.
Transfer of Interest in 403(b)
Contract
Contract exchanges. If you transfer all or part of your in-
terest from a 403(b) contract to another 403(b) contract
(held in the same plan), the transfer is tax free, and is re-
ferred to as a “contract exchange.” This was previously
known as a 90-24 transfer. A contract exchange is similar
to a 90-24 transfer with one major difference. Previously,
you were able to accomplish the transfer without your em-
ployer’s involvement. After September 24, 2007, all such
transfers are accomplished through a contract exchange
requiring your employer’s involvement. In addition, the
plan must provide for the exchange and the transferred in-
terest must be subject to the same or stricter distribution
restrictions. Finally, your accumulated benefit after the ex-
change must be equal to what it was before the exchange.
Transfers that don’t satisfy this rule are plan distribu-
tions and are generally taxable as ordinary income.
Plan-to-plan transfers. You may also transfer part or all
of your interest from a 403(b) plan to another 403(b) plan if
you are an employee of (or were formerly employed by)
the employer of the plan to which you would like to trans-
fer. Both the initial plan and the receiving plan must pro-
vide for transfers. Your accumulated benefit after the
transfer must be at least equal to what it was before the
transfer. The new plan’s restrictions on distributions must
be the same or stricter than those of the original plan.
Tax-free transfers for certain cash distributions. A
tax-free transfer may also apply to a cash distribution of
your 403(b) account from an insurance company that is
subject to a rehabilitation, conservatorship, insolvency, or
similar state proceeding. To receive tax-free treatment,
you must do all of the following.
• Withdraw all the cash to which you are entitled in full
settlement of your contract rights or, if less, the maxi-
mum permitted by the state.
• Reinvest the cash distribution in a single policy or con-
tract issued by another insurance company or in a sin-
gle custodial account subject to the same or stricter
distribution restrictions as the original contract not
later than 60 days after you receive the cash distribu-
tion.
• Assign all future distribution rights to the new contract
or account for investment in that contract or account if
you received an amount that is less than what you are
entitled to because of state restrictions.
Publication 571 (1-2026) Chapter 8 Distributions and Rollovers 19
In addition to the preceding requirements, you must
provide the new insurer with a written statement
containing all of the following information.
• The gross amount of cash distributed under the old
contract.
• The amount of cash reinvested in the new contract.
• Your investment in the old contract on the date you re-
ceive your first cash distribution.
Also, you must attach the following items to your timely
filed income tax return in the year you receive the first dis-
tribution of cash.
1. A copy of the statement you gave the new insurer.
2. A statement that includes:
a. The words ELECTION UNDER REV. PROC.
92-44,
b. The name of the company that issued the new
contract, and
c. The new policy number.
Direct trustee-to-trustee transfer. If you make a direct
trustee-to-trustee transfer from your governmental 403(b)
account to a defined benefit governmental plan, it may not
be includible in gross income.
The transfer amount isn’t includible in gross income if it
is made to:
• Purchase permissive service credits; or
• Repay contributions and earnings that were previously
refunded under a forfeiture of service credit under the
plan, or under another plan maintained by a state or
local government employer within the same state.
After-tax contributions. For distributions beginning
after December 31, 2006, after-tax contributions can be
rolled over between a 403(b) plan and a defined benefit
plan, an IRA, or a defined contribution plan. If the rollover
is to or from a 403(b) plan, it must occur through a direct
trustee-to-trustee transfer.
Permissive service credit. A permissive service
credit is credit for a period of service recognized by a de-
fined benefit governmental plan only if you voluntarily con-
tribute to the plan an amount that doesn’t exceed the
amount necessary to fund the benefit attributable to the
period of service and the amount contributed is in addition
to the regular employee contribution, if any, under the
plan.
A permissive service credit may also include service
credit for up to 5 years where there is no performance of
service, or service credited to provide an increased bene-
fit for service credit which a participant is receiving under
the plan.
Check with your plan administrator as to the type and
extent of service that may be purchased by this transfer.
Tax-Free Rollovers
You can generally roll over tax free all or any part of a dis-
tribution from a 403(b) plan to a traditional IRA or a
non-Roth eligible retirement plan, except for any nonquali-
fying distributions, described later. You may also roll over
any part of a distribution from a 403(b) plan by converting
it through a direct rollover, described below, to a Roth IRA.
Conversion amounts are generally includible in your taxa-
ble income in the year of the distribution from your 403(b)
account. See Pub. 590-A for more information about con-
version into a Roth IRA.
Note: A participant is required to roll over distribution
amounts received within 60 calendar days in order for the
amount to be treated as nontaxable. Distribution amounts
that are rolled over within the 60 days aren’t subject to the
10% additional tax on early distributions.
Note: The repayment of a qualified birth or adoption
distribution, an emergency personal expense distribution,
or a distribution to a domestic abuse victim from an appli-
cable eligible retirement plan is treated as a direct transfer
of the distribution to the plan within 60 days of the distribu-
tion.
Rollovers to and from 403(b) plans. You can generally
roll over tax free all or any part of a distribution from an eli-
gible retirement plan to a 403(b) plan. Beginning January
1, 2008, distributions from tax-qualified retirement plans
and tax-sheltered annuities can be converted by making a
direct rollover into a Roth IRA subject to the restrictions
that currently apply to rollovers from a traditional IRA into a
Roth IRA. Converted amounts are generally includible in
your taxable income in the year of the distribution from
your 403(b) account. See Pub. 590-A for more information
on conversion into a Roth IRA.
If a distribution includes both pre-tax contributions and
after-tax contributions, the portion of the distribution that is
rolled over is treated as consisting first of pre-tax amounts
(contributions and earnings that would be includible in in-
come if no rollover occurred). This means that if you roll
over an amount that is at least as much as the pre-tax por-
tion of the distribution, you don’t have to include any of the
distribution in income.
For more information on rollovers and eligible retire-
ment plans, see Pub. 575.
Caution: If you roll over money or other property from
a 403(b) plan to an eligible retirement plan, see Pub. 575
for information about possible effects on later distributions
from the eligible retirement plan.
Hardship exception to rollover rules. The IRS may
waive the 60-day rollover period if the failure to waive such
requirement would be against equity or good conscience,
including cases of casualty, disaster, or other events be-
yond the reasonable control of an individual.
20 Chapter 8 Distributions and Rollovers Publication 571 (1-2026)
Ways to get a waiver of the 60-day rollover require-
ment. There are three ways to obtain a waiver of the
60-day rollover requirement.
• You qualify for an automatic waiver.
• You self-certify that you met the requirements of a
waiver.
• You request and receive a private letter ruling granting
a waiver.
How do you qualify for an automatic waiver? You
qualify for an automatic waiver if all of the following apply.
• The financial institution receives the funds on your be-
half before the end of the 60-day rollover period.
• You followed all of the procedures set by the financial
institution for depositing the funds into an IRA or other
eligible retirement plan within the 60-day rollover pe-
riod (including giving instructions to deposit the funds
into a plan or IRA).
• The funds are not deposited into a plan or IRA within
the 60-day rollover period solely because of an error
on the part of the financial institution.
• The funds are deposited into a plan or IRA within 1
year from the beginning of the 60-day rollover period.
• It would have been a valid rollover if the financial insti-
tution had deposited the funds as instructed.
If you do not qualify for an automatic waiver, you can use
the self-certification procedure to make a late rollover con-
tribution or you can apply to the IRS for a waiver of the
60-day rollover requirement.
How do you self-certify that you qualify for a
waiver? Based on Revenue Procedure 2016-47, 2016-37
I.R.B. 346, available at IRS.gov/irb/2016-37_IRB/
ar09.html, you may make a written certification to a plan
administrator or an IRA trustee that you missed the 60-day
rollover contribution deadline because of one or more of
the 11 reasons listed in Revenue Procedure 2016-47. A
plan administrator or an IRA trustee may rely on the certifi-
cation in accepting and reporting receipt of the rollover
contribution. You may make the certification by using the
model letter in the appendix to the revenue procedure or
by using a letter that is substantially similar. There is no
IRS fee for self certification. A copy of the certification
should be kept in your files and be available if requested
on audit.
For additional information on rollovers, see Pub. 590-A.
How do you apply for a waiver ruling and what is
the fee? You can request a ruling according to the proce-
dures outlined in Revenue Procedure 2003-16, as modi-
fied by Revenue Procedure 2016-47 and Revenue Proce-
dure 2020-46; and Revenue Procedure 2026-4. See
Appendix A for the applicable user fee.
How does the IRS determine whether to grant a
waiver in a private letter ruling? In determining
whether to issue a favorable letter ruling granting a waiver,
the IRS will consider all of the relevant facts and circum-
stances, including:
• Whether errors were made by the financial institution,
that is, the plan administrator, or IRA trustee, issuer, or
custodian;
• Whether you were unable to complete the rollover
within the 60-day period due to death, disability, hospi-
talization, incarceration, serious illness, restrictions im-
posed by a foreign country, or postal error;
• Whether you used the amount distributed; and
• How much time has passed since the date of the dis-
tribution.
Note: The IRS can waive only the 60-day rollover re-
quirement and not the other requirements for a valid roll-
over contribution.
For more information on waivers of the 60-day rollover
requirement, go to IRS.gov/Retirement-Plans/Retirement-
Plans-FAQS-Relating-to-Waivers-of-the-60-Day-Rollover-
Requirement.
Eligible retirement plans. The following are consid-
ered eligible retirement plans.
• IRAs.
• Roth IRAs.
• 403(a) annuity plans.
• 403(b) plans.
• Government eligible 457 plans.
• Qualified retirement plans.
If the distribution is from a designated Roth account, then
the only eligible retirement plan is another designated
Roth account or a Roth IRA.
Nonqualifying distributions. You can’t roll over tax
free:
• Minimum required distributions (generally required to
begin at age 73 if you reach age 72 after December
31, 2022);
• Substantially equal payments over your life or life ex-
pectancy;
• Substantially equal payments over the joint lives or life
expectancies of your beneficiary and you;
• Substantially equal payments for a period of 10 years
or more;
• Hardship distributions; or
• Corrective distributions of excess contributions or ex-
cess deferrals, and any income allocable to the ex-
cess, or excess annual additions and any allocable
gains.
Rollover of nontaxable amounts. You may be able to
roll over the nontaxable part of a distribution (such as your
after-tax contributions) made to another eligible retirement
plan, traditional IRA, or Roth IRA. The transfer must be
Publication 571 (1-2026) Chapter 8 Distributions and Rollovers 21
made either through a direct rollover to an eligible plan
that separately accounts for the taxable and nontaxable
parts of the rollover or through a rollover to a traditional
IRA or Roth IRA.
If you roll over only part of a distribution that includes
both taxable and nontaxable amounts, the amount you roll
over is treated as coming first from the taxable part of the
distribution.
Direct rollovers of 403(b) plan distributions. You have
the option of having your 403(b) plan make the rollover di-
rectly to a traditional IRA, Roth IRA, or new plan. Before
you receive a distribution, your plan will give you informa-
tion on this. It is generally to your advantage to choose this
option because your plan won’t withhold tax on the distri-
bution if you choose it.
Distribution received by you. If you receive a distribu-
tion that qualifies to be rolled over, you can roll over all or
any part of the distribution. Generally, you will receive only
80% of the distribution because 20% must be withheld. If
you roll over only the 80% you receive, you must pay tax
on the 20% you didn’t roll over. You can replace the 20%
that was withheld with other money within the 60-day pe-
riod to make a 100% rollover.
Voluntary deductible contributions. For tax years
1982 through 1986, employees could make deductible
contributions to a 403(b) plan under the IRA rules instead
of deducting contributions to a traditional IRA.
If you made voluntary deductible contributions to a
403(b) plan under these traditional IRA rules, the distribu-
tion of all or part of the accumulated deductible contribu-
tions may be rolled over if it otherwise qualifies as a distri-
bution you can roll over. Accumulated deductible
contributions are the deductible contributions:
• Plus:
1. Income allocable to the contributions,
2. Gain allocable to the contributions, and
• Minus:
1. Expenses and losses allocable to the contribu-
tions; and
2. Distributions from the contributions, income, or
gain.
Excess employer contributions. The portion of a distri-
bution from a 403(b) plan transferred to a traditional IRA
that was previously included in income as excess em-
ployer contributions isn’t an eligible rollover distribution.
Its transfer doesn’t affect the rollover treatment of the
eligible portion of the transferred amounts. However, the
ineligible portion is subject to the traditional IRA contribu-
tion limits and may create an excess IRA contribution sub-
ject to a 6% excise tax. See chapter 1 of Pub. 590-A.
Qualified domestic relations order (QDRO). You may
be able to roll over tax free all or any part of an eligible roll-
over distribution from a 403(b) plan that you receive under
a QDRO. If you receive the interest in the 403(b) plan as
an employee's spouse or former spouse under a QDRO,
all of the rollover rules apply to you as if you were the em-
ployee. You can roll over your interest in the plan to a tradi-
tional IRA or another 403(b) plan. For more information on
the treatment of an interest received under a QDRO, see
Pub. 575.
Spouses of deceased employees. If you are the
spouse of a deceased employee, you can roll over the
qualifying distribution attributable to the employee. You
can make the rollover to any eligible retirement plan.
After you roll money and other property over from a
403(b) plan to an eligible retirement plan, and you take a
distribution from that plan, you won’t be eligible to receive
the capital gain treatment or the special averaging treat-
ment for the distribution.
Second rollover. If you roll over a qualifying distribu-
tion to a traditional IRA, you can, if certain conditions are
satisfied, later roll the distribution into another 403(b) plan.
For more information, see IRA as a holding account (con-
duit IRA) for rollovers to other eligible plans in chapter 1 of
Pub. 590-A.
Nonspouse beneficiary. A nonspouse beneficiary may
make a direct rollover of a distribution from a 403(b) plan
of a deceased participant if the rollover is a direct transfer
to an inherited IRA established to receive the distribution.
If the rollover is a direct trustee-to-trustee transfer to an
IRA established to receive the distribution:
• The transfer will be treated as an eligible rollover distri-
bution,
• The IRA will be considered an inherited account, and
• The required minimum distribution rules that apply in
instances where the participant dies before the entire
interest is distributed will apply to the transferred IRA.
For more information on IRAs, see Pubs. 590-A and
590-B.
Frozen deposits. The 60-day period usually allowed for
completing a rollover is extended for any time that the
amount distributed is a frozen deposit in a financial institu-
tion. The 60-day period can’t end earlier than 10 days af-
ter the deposit ceases to be a frozen deposit.
A frozen deposit is any deposit that on any day during
the 60-day period can’t be withdrawn because:
1. The financial institution is bankrupt or insolvent, or
2. The state where the institution is located has placed
limits on withdrawals because one or more banks in
the state are (or are about to be) bankrupt or insol-
vent.
Gift Tax
If, by choosing or not choosing an election, or option, you
provide an annuity for your beneficiary at or after your
death, you may have made a taxable gift equal to the
value of the annuity.
22 Chapter 8 Distributions and Rollovers Publication 571 (1-2026)
Joint and survivor annuity. If the gift is an interest in a
joint and survivor annuity where only you and your spouse
have the right to receive payments, the gift will generally
be treated as qualifying for the unlimited marital deduc-
tion.
More information. For information on the gift tax, see
Pub. 559, Survivors, Executors, and Administrators.
9.
Worksheets
Chapter 2 introduced you to the term “maximum amount
contributable” (MAC). Generally, your MAC is the lesser of
your:
• Limit on annual additions (chapter 3), or
• Limit on elective deferrals (chapter 4).
The worksheets in this chapter can help you figure the
cost of incidental life insurance, your includible compensa-
tion, your limit on annual additions, your limit on elective
deferrals, your limit on catch-up contributions, and your
MAC.
After completing the worksheets, you should maintain
them with your 403(b) records for that year. Do not attach
them to your tax return. At the end of the year or the begin-
ning of the next year, you should compare your estimated
compensation figures with your actual figures.
If your compensation is the same as, or more than, the
projected amounts and the calculations are correct, then
you should simply file these worksheets with your other
tax records for the year.
If your compensation was lower than your estimated fig-
ures, you will need to check the amount contributed during
the year to determine if contributions are more than your
MAC.
When Should I Figure My
MAC?
At the beginning of each year, you should figure your MAC
using a conservative estimate of your compensation.
Should your income change during the year, you should
refigure your MAC based on a revised conservative esti-
mate. By doing this, you will be able to determine if contri-
butions to your 403(b) account should be increased or de-
creased for the year.
Checking the Previous Year's
Contributions
At the beginning of the following year, you should refigure
your MAC based on your actual earned income.
At the end of the current year or the beginning of the
next year, you should check your contributions to be sure
you didn’t exceed your MAC. This means refiguring your
limit based on your actual compensation figures for the
year. This will allow you to determine if the amount contrib-
uted is more than the allowable amounts, and possibly
avoid additional taxes.
Available Worksheets
The following worksheets have been provided to help you
figure your MAC.
• Worksheet A. Cost of Incidental Life Insurance.
• Worksheet B. Includible Compensation for Your Most
Recent Year of Service.
• Worksheet C. Limit on Catch-up Contributions.
• Worksheet 1. Maximum Amount Contributable (MAC).
Cost of Incidental Life Insurance
Note: Use this worksheet to figure the cost of incidental life insurance included in your annuity contract.
This amount will be used to figure includible compensation for your most recent year of service.
1. Enter the value of the contract (amount payable upon your death) . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter the cash value in the contract at the end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Subtract line 2 from line 1. This is the value of your current life insurance protection . . . . . . . . . . . 3.
4. Enter your age on your birthday nearest the beginning of the policy year . . . . . . . . . . . . . . . . . . . . 4.
5. Enter the 1-year term premium for $1,000 of life insurance based on your age. (From Figure
3-1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Divide line 3 by $1,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Multiply line 6 by line 5. This is the cost of your incidental life insurance . . . . . . . . . . . . . . . . . . . . . 7.
Worksheet A.
Publication 571 (1-2026) Chapter 9 Worksheets 23
Includible Compensation for Your Most Recent Year of Service1
Note: Use this worksheet to figure includible compensation for your most recent year of service.
1. Enter your includible wages from the employer maintaining your 403(b) account for your most
recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
2. Enter elective deferrals excluded from your gross income for your most recent year of
service2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter amounts contributed or deferred by your employer under a cafeteria plan for your most
recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter amounts contributed or deferred by your employer according to your election to your 457
account (a nonqualified plan of a state or local government or of a tax-exempt organization) for
your most recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter pre-tax contributions (employer's contributions made on your behalf according to your
election) to a qualified transportation fringe benefit plan for your most recent year of
service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter your foreign earned income exclusion for your most recent year of service . . . . . . . . . . . 6.
7. Add lines 1, 2, 3, 4, 5, and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter the cost of incidental life insurance that is part of your annuity contract for your most
recent year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Enter compensation that was both:
• Earned during your most recent year of service, and
• Earned while your employer wasn’t qualified to maintain a 403(b) plan . . . . . . . . . . . . . . . . 9.
10. Add lines 8 and 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Subtract line 10 from line 7. This is your includible compensation for your most recent year of
service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
1 Use estimated amounts if figuring includible compensation before the end of the year.
2 Elective deferrals made to a designated Roth account aren’t excluded from your gross income and shouldn’t be included on this line.
Worksheet B.
Limit on Catch-up Contributions
Note: If you will be age 50 or older by the end of the year, use this worksheet to figure your limit on
catch-up contributions.
1. Maximum catch-up contributions if you will be age 50 or older by the end of the year, but not 60,
61, 62, or 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. $x,xxx
2. Maximum catch-contributions if you will be age 60, 61, 62, or 63 by the end of the year . . . . . . . . 2. $11,250
3. Enter your includible compensation for your most recent year of service . . . . . . . . . . . . . . . . . . . . 3.
4. Enter your elective deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Subtract line 3 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Enter the lesser of line 1 or line 5 if you will be age 50 or over by the end of the year, but not 60,
61, 62, or 63. If you will be age 60, 61, 62, or 63 by the end of the year, enter the lesser of line 2
or line 5. This is your limit on catch-up contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
Worksheet C.
24 Chapter 9 Worksheets Publication 571 (1-2026)
Maximum Amount Contributable (MAC)
Note: Use this worksheet to figure your MAC.
Worksheet 1.
Part I. Limit on Annual Additions
1. Enter your includible compensation for your most recent year of service . . . . . . . . . . . . . . . . . . 1.
2. Maximum:1
• For 2025, enter $70,000.
• For 2026, enter $72,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Enter the lesser of line 1 or line 2. This is your limit on annual additions . . . . . . . . . . . . . . . . . . 3.
Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3
on line 18.
Part II. Limit on Elective Deferrals
4. Maximum contribution:
• For 2025, enter $23,500.
• For 2026, enter $24,500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Note: If you have at least 15 years of service with a qualifying organization, complete lines 5
through 17. If not, enter zero (-0-) on line 16 and go to line 17.
5. Amount per year of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. $ 5,000
6. Enter your years of service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
7. Multiply line 5 by line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Enter the total of all elective deferrals made for you by the qualifying organization for prior
years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Subtract line 8 from line 7. If zero or less, enter zero (-0-) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Maximum increase in limit for long service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. $15,000
11. Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year
rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the aggregate amount of all designated Roth contributions permitted for prior years under
the 15-year rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Add line 11 and line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
14. Subtract line 13 from line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Maximum additional contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. $ 3,000
16. Enter the least of line 9, line 14, or line 15. This is your increase in the limit for long service . . . . 16.
17. Add lines 4 and 16. This is your limit on elective deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.
Part III. Maximum Amount Contributable
18. • If you had only nonelective contributions, enter the amount from line 3. This is your MAC.
• If you had only elective deferrals, enter the lesser of line 3 or line 17. This is your MAC.
• If you had both elective deferrals and nonelective contributions, enter the amount from
line 3. This is your MAC. (Use the amount on line 17 to determine if you have excess
elective deferrals as explained in chapter 7.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.
1 If you participate in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a
qualified plan and simplified employee pension plans of all corporations, partnerships, and sole proprietorships in which you have more than 50%
control. You must also combine the contributions made to all 403(b) accounts on your behalf by your employer.
Publication 571 (1-2026) Chapter 9 Worksheets 25
10.
Retirement Savings
Contributions Credit
(Saver's Credit)
If you or your employer makes eligible contributions (de-
fined later) to a retirement plan, you may be able to take a
credit of up to $2,000 (up to $4,000 if filing jointly). This
credit could reduce the federal income tax you pay dollar
for dollar.
Can you claim the credit? If you or your employer
makes eligible contributions to a retirement plan, you can
claim the credit if all of the following apply.
1. You aren’t under age 18.
2. You aren’t a full-time student (explained next).
3. No one else, such as your parent(s), claims an ex-
emption for you on their tax return.
4. Your adjusted gross income (defined later) isn’t more
than:
a. $79,000 for 2025 ($80,500 for 2026) if your filing
status is married filing jointly;
b. $59,250 for 2025 ($60,375 for 2026) if your filing
status is head of household (with qualifying per-
son); or
c. $39,500 for 2025 ($40,250 for 2026) if your filing
status is single, married filing separately, or quali-
fying surviving spouse with dependent child.
Full-time student. You are a full-time student if, during
some part of each of 5 calendar months (not necessarily
consecutive) during the calendar year, you are either:
• A full-time student at a school that has a regular teach-
ing staff, course of study, and regularly enrolled body
of students in attendance; or
• A student taking a full-time, on-farm training course
given by either a school that has a regular teaching
staff, course of study, and regularly enrolled body of
students in attendance; or a state, county, or local
government.
You are a full-time student if you are enrolled for the num-
ber of hours or courses the school considers to be
full-time.
Adjusted gross income. This is generally the amount
on line 11a of your 2025 Form 1040 or 1040-SR. For pur-
poses of this section, adjusted gross income shall be de-
termined without regard to sections 911, 931, and 933.
You must add to that amount any exclusion or deduction
from gross income claimed for the year for:
• Foreign earned income;
• Foreign housing costs;
• Income for bona fide residents of American Samoa,
Guam, or the Northern Mariana Islands; and
• Income from Puerto Rico.
Eligible contributions. These include:
1. Contributions to a traditional or Roth IRA;
2. Elective deferrals, including amounts designated as
after-tax Roth contributions, to:
a. A 401(k) plan (including a SIMPLE 401(k) plan),
b. A section 403(b) annuity,
c. An eligible deferred compensation plan of a state
or local government (a governmental 457 plan),
d. A SIMPLE IRA plan, or
e. A SARSEP plan;
3. Contributions to a section 501(c)(18) plan; and
4. ABLE account contributions by the designated benefi-
ciary as defined by section 529A.
They also include voluntary after-tax employee contribu-
tions to a tax-qualified retirement plan or a section 403(b)
annuity. For purposes of the credit, an employee contribu-
tion will be voluntary as long as it isn’t required as a condi-
tion of employment.
Reducing eligible contributions. Reduce your eligible
contributions (but not below zero) by the total distributions
you received during the testing period (defined later) from
any IRA, plan, or annuity included earlier under Eligible
contributions. Also, reduce your eligible contributions by
any distribution from a Roth IRA that isn’t rolled over, even
if the distribution isn’t taxable.
Do not reduce your eligible contributions by any of the
following.
1. The portion of any distribution which isn’t includible in
income because it is a trustee-to-trustee transfer or a
rollover distribution.
2. Distributions that are taxable as the result of an
in-plan rollover to your designated Roth account.
3. Any distribution that is a return of a contribution to an
IRA (including a Roth IRA) made during the year for
which you claim the credit if:
a. The distribution is made before the due date (in-
cluding extensions) of your tax return for that year,
b. You don’t take a deduction for the contribution,
and
c. The distribution includes any income attributable
to the contribution.
4. Loans from a qualified employer plan treated as a dis-
tribution.
5. Distributions of excess contributions or deferrals (and
income attributable to excess contributions and
deferrals).
26 Chapter 10 Retirement Savings Contributions Credit
(Saver's Credit)
Publication 571 (1-2026)
6. Distributions of dividends paid on stock held by an
employee stock ownership plan under section 404(k).
7. Distributions from an eligible retirement plan that are
converted or rolled over to a Roth IRA.
8. Distributions from a military retirement plan.
9. Distributions from an inherited IRA by a nonspousal
beneficiary.
Distributions received by spouse. Any distributions
your spouse receives are treated as received by you if you
file a joint return with your spouse both for the year of the
distribution and for the year for which you claim the credit.
Testing period. The testing period consists of:
• The year in which you claim the credit,
• The 2 years before the year in which you claim the
credit, and
• The period after the end of the year in which you claim
the credit and before the due date of the return (in-
cluding extensions) for filing your return for the year in
which you claimed the credit.
Example. You and your spouse filed joint returns in
2023 and 2024, and plan to do so in 2025 and 2026. You
received a taxable distribution from a qualified plan in
2023 and a taxable distribution from an eligible section
457(b) deferred compensation plan in 2024. Your spouse
received taxable distributions from a Roth IRA in 2025 and
tax-free distributions from a Roth IRA in 2026 before April
15. You made eligible contributions to an IRA in 2025 and
you otherwise qualify for this credit. You must reduce the
amount of your qualifying contributions in 2025 by the total
of the distributions you and your spouse received in 2023,
2024, 2025, and 2026.
Maximum eligible contributions. After your contribu-
tions are reduced, the maximum annual contribution on
which you can base the credit is $2,000 per person.
Effect on other credits. The amount of this credit won’t
change the amount of your refundable tax credits. A re-
fundable tax credit, such as the earned income credit or
the additional child tax credit, is an amount that you would
receive as a refund even if you didn’t otherwise owe any
taxes.
Maximum credit. This is a nonrefundable credit. The
amount of the credit in any year can’t be more than the
amount of tax that you would otherwise pay (not counting
any refundable credits or the adoption credit) in any year.
If your tax liability is reduced to zero because of other non-
refundable credits, such as the education credits, then you
won’t be entitled to this credit.
How to figure and report the credit. The amount of the
credit you can get is based on the contributions you make
and your credit rate. The credit rate can be as low as 10%
or as high as 50%. Your credit rate depends on your in-
come and your filing status. See Form 8880 to determine
your credit rate.
The maximum contribution taken into account is $2,000
per person. On a joint return, up to $2,000 is taken into ac-
count for each spouse.
Figure the credit on Form 8880. Report the credit on
line 4 of your 2025 Schedule 3 (Form 1040) and attach
Form 8880 to your return.
How To Get Tax Help
If you have questions about a tax issue; need help prepar-
ing your tax return; or want to download free publications,
forms, or instructions, go to IRS.gov to find resources that
can help you right away.
Tax reform. Tax reform legislation impacting federal
taxes, credits, and deductions was enacted in P.L. 119-21,
commonly known as the One Big Beautiful Bill Act on July
4, 2025. Go to IRS.gov/OBBB for more information and
updates on how the legislation affects your taxes.
Preparing and filing your tax return. After receiving all
your wage and earnings statements (Forms W-2, W-2G,
1099-R, 1099-MISC, 1099-NEC, etc.); unemployment
compensation statements (by mail or in a digital format) or
other government payment statements (Form 1099-G);
and interest, dividend, and retirement statements from
banks and investment firms (Forms 1099), you have sev-
eral options to choose from to prepare and file your tax re-
turn. You can prepare the tax return yourself, see if you
qualify for free tax preparation, or hire a tax professional to
prepare your return.
Free options for tax preparation. Your options for pre-
paring and filing your return online or in your local com-
munity, if you qualify, include the following.
• Free File. This program lets you prepare and file your
federal individual income tax return for free using soft-
ware or Free File Fillable Forms. However, state tax
preparation may not be available through Free File. Go
to IRS.gov/FreeFile to see if you qualify for free online
federal tax preparation, e-filing, and direct deposit or
payment options.
• VITA. The Volunteer Income Tax Assistance (VITA)
program offers free tax help to people with
low-to-moderate incomes, persons with disabilities,
and limited-English-speaking taxpayers who need
help preparing their own tax returns. Go to IRS.gov/
VITA, download the free IRS2Go app, or call
800-906-9887 for information on free tax return prepa-
ration.
• TCE. The Tax Counseling for the Elderly (TCE) pro-
gram offers free tax help for all taxpayers, particularly
those who are 60 years of age and older. TCE volun-
teers specialize in answering questions about pen-
sions and retirement-related issues unique to seniors.
Go to IRS.gov/TCE or download the free IRS2Go app
for information on free tax return preparation.
• MilTax. Members of the U.S. Armed Forces and quali-
fied veterans may use MilTax, a free tax service
Publication 571 (1-2026) 27
offered by the Department of Defense through Military
OneSource. For more information, go to
MilitaryOneSource (MilitaryOneSource.mil/MilTax).
Also, the IRS offers Free Fillable Forms, which can
be completed online and then e-filed regardless of in-
come.
Using online tools to help prepare your return. Go to
IRS.gov/Tools for the following.
• The Earned Income Tax Credit Assistant (IRS.gov/
EITCAssistant) determines if you’re eligible for the
earned income credit (EITC).
• The Online EIN Application (IRS.gov/EIN) helps you
get an employer identification number (EIN) at no
cost.
• The Tax Withholding Estimator (IRS.gov/W4app)
makes it easier for you to estimate the federal income
tax you want your employer to withhold from your pay-
check. This is tax withholding. See how your withhold-
ing affects your refund, take-home pay, or tax due.
• The Sales Tax Deduction Calculator (IRS.gov/
SalesTax) figures the amount you can claim if you
itemize deductions on Schedule A (Form 1040).
Getting answers to your tax questions. On IRS.gov,
you can get up-to-date information on current events and
changes in tax law.
• IRS.gov/Help: A variety of tools to help you get an-
swers to some of the most common tax questions.
• IRS.gov/ITA: The Interactive Tax Assistant, a tool that
will ask you questions and, based on your input, pro-
vide answers on a number of tax law topics.
• IRS.gov/Forms: Find forms, instructions, and publica-
tions. You will find details on the most recent tax
changes and interactive links to help you find answers
to your questions.
• You may also be able to access tax law information in
your e-filing software.
Need someone to prepare your tax return? There are
various types of tax return preparers, including enrolled
agents, certified public accountants (CPAs), accountants,
and many others who don’t have professional credentials.
If you choose to have someone prepare your tax return,
choose that preparer wisely. A paid tax preparer is:
• Primarily responsible for the overall substantive accu-
racy of your return,
• Required to sign the return, and
• Required to include their preparer tax identification
number (PTIN).
Caution: Although the tax preparer always signs the
return, you're ultimately responsible for providing all the in-
formation required for the preparer to accurately prepare
your return and for the accuracy of every item reported on
the return. Anyone paid to prepare tax returns for others
should have a thorough understanding of tax matters. For
more information on how to choose a tax preparer, go to
Tips for Choosing a Tax Preparer on IRS.gov.
Employers can register to use Business Services On-
line. The Social Security Administration (SSA) offers on-
line service at SSA.gov/employer for fast, free, and secure
online W-2 filing options to CPAs, accountants, enrolled
agents, and individuals who process Form W-2, Wage
and Tax Statement; and Form W-2c, Corrected Wage and
Tax Statement.
Business tax account. If you are a sole proprietor, a
partnership, an S corporation, a C corporation, or a sin-
gle-member limited liability company (LLC), you can view
your tax information on record with the IRS and do more
with a business tax account. Go to IRS.gov/
BusinessAccount for more information.
IRS social media. Go to IRS.gov/SocialMedia to see the
various social media tools the IRS uses to share the latest
information on tax changes, scam alerts, initiatives, prod-
ucts, and services. At the IRS, privacy and security are our
highest priority. We use these tools to share public infor-
mation with you. Don’t post your social security number
(SSN) or other confidential information on social media
sites. Always protect your identity when using any social
networking site.
The following IRS YouTube channels provide short, in-
formative videos on various tax-related topics in English,
Spanish, and ASL.
• Youtube.com/irsvideos.
• Youtube.com/irsvideosASL.
Online tax information in other languages. You can
find information on IRS.gov/MyLanguage if English isn’t
your native language.
Over-the-Phone Interpreter (OPI) Service. The IRS
serves taxpayers with limited-English proficiency (LEP) by
offering OPI services. The OPI Service is available at Tax-
payer Assistance Centers (TACs), most IRS offices, and
every VITA/TCE tax return site. The OPI Service is acces-
sible in more than 350 languages.
Accessibility Helpline available for taxpayers with
disabilities. Taxpayers who need information about ac-
cessibility services can call 833-690-0598. The Accessi-
bility Helpline can answer questions related to current and
future accessibility products and services available in al-
ternative media formats (for example, braille-ready, large
print, audio, etc.). The Accessibility Helpline does not
have access to your IRS account. For help with tax law, re-
funds, or account-related issues, go to IRS.gov/
LetUsHelp.
Alternative media preference. Form 9000, Alternative
Media Preference, or Form 9000(SP) allows you to elect to
receive certain types of written correspondence in the fol-
lowing formats.
• Standard Print.
• Large Print.
28 Publication 571 (1-2026)
• Braille.
• Audio (MP3).
• Plain Text File (TXT).
• Braille-Ready File (BRF).
Disasters. Go to IRS.gov/DisasterRelief to review the
available disaster tax relief.
Getting tax forms and publications. Go to IRS.gov/
Forms to view, download, or print all the forms, instruc-
tions, and publications you may need. Or, you can go to
IRS.gov/OrderForms to place an order.
Mobile-friendly forms. You’ll need an IRS Online Ac-
count (OLA) to complete mobile-friendly forms that require
signatures. You’ll have the option to submit your form(s)
online or download a copy for mailing. You’ll need scans of
your documents to support your submission. Go to
IRS.gov/MobileFriendlyForms for more information.
Getting tax publications and instructions in eBook
format. Download and view most tax publications and in-
structions (including the Instructions for Form 1040) on
mobile devices as eBooks at IRS.gov/eBooks.
IRS eBooks have been tested using Apple's iBooks for
iPad. Our eBooks haven’t been tested on other dedicated
eBook readers, and eBook functionality may not operate
as intended.
Access your online account (individual taxpayers
only). Go to IRS.gov/Account to securely access infor-
mation about your federal tax account.
• View the amount you owe and a breakdown by tax
year.
• See payment plan details or apply for a new payment
plan.
• Make a payment or view 5 years of payment history
and any pending or scheduled payments.
• Access your tax records, including key data from your
most recent tax return, and transcripts.
• View digital copies of select notices from the IRS.
• Approve or reject authorization requests from tax pro-
fessionals.
Get a transcript of your return. With an online account,
you can access a variety of information to help you during
the filing season. You can get a transcript, review your
most recently filed tax return, and get your adjusted gross
income. Create or access your online account at IRS.gov/
Account.
Tax Pro Account. This tool lets your tax professional
submit an authorization request to access your individual
taxpayer IRS OLA. For more information, go to IRS.gov/
TaxProAccount.
Using direct deposit. The safest and easiest way to re-
ceive a tax refund is to e-file and choose direct deposit,
which securely and electronically transfers your refund di-
rectly into your financial account. Direct deposit also
avoids the possibility that your check could be lost, stolen,
destroyed, or returned undeliverable to the IRS. Eight in
10 taxpayers use direct deposit to receive their refunds. If
you don’t have a bank account, go to IRS.gov/
DirectDeposit for more information on where to find a bank
or credit union that can open an account online.
Reporting and resolving your tax-related identity
theft issues.
• Tax-related identity theft happens when someone
steals your personal information to commit tax fraud.
Your taxes can be affected if your SSN is used to file a
fraudulent return or to claim a refund or credit.
• The IRS doesn’t initiate contact with taxpayers by
email, text messages (including shortened links), tele-
phone calls, or social media channels to request or
verify personal or financial information. This includes
requests for personal identification numbers (PINs),
passwords, or similar information for credit cards,
banks, or other financial accounts.
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft
Central webpage, for information on identity theft and
data security protection for taxpayers, tax professio-
nals, and businesses. If your SSN has been lost or
stolen or you suspect you’re a victim of tax-related
identity theft, you can learn what steps you should
take.
• Get an Identity Protection PIN (IP PIN). IP PINs are
six-digit numbers assigned to taxpayers to help pre-
vent the misuse of their SSNs on fraudulent federal in-
come tax returns. When you have an IP PIN, it pre-
vents someone else from filing a tax return with your
SSN. To learn more, go to IRS.gov/IPPIN.
Ways to check on the status of your refund.
• Go to IRS.gov/Refunds.
• Download the official IRS2Go app to your mobile de-
vice to check your refund status.
• Call the automated refund hotline at 800-829-1954.
Caution: The IRS can’t issue refunds before mid-Feb-
ruary for returns that claimed the EITC or the additional
child tax credit (ACTC). This applies to the entire refund,
not just the portion associated with these credits.
Making a tax payment. The IRS recommends paying
electronically whenever possible. Options to pay electroni-
cally are included in the list below. Payments of U.S. tax
must be remitted to the IRS in U.S. dollars. Digital assets
are not accepted. Go to IRS.gov/Payments for information
on how to make a payment using any of the following op-
tions.
• IRS Direct Pay: Pay taxes from your bank account. It’s
free and secure, and no sign-in is required. You can
change or cancel within two days of scheduled pay-
ment.
Publication 571 (1-2026) 29
• Debit Card, Credit Card, or Digital Wallet: Choose an
approved payment processor to pay online or by
phone.
• Electronic Funds Withdrawal: Schedule a payment
when filing your federal taxes using tax return prepara-
tion software or through a tax professional.
• Electronic Federal Tax Payment System (EFTPS):This
is the best option for businesses. Enrollment is re-
quired.
• Check or Money Order: Mail your payments to the ad-
dress listed on the notice or instructions.
• Cash: You may be able to pay your taxes with cash at
a participating retail store.
• Same-day wire: You may be able to do same-day wire
from your financial institution. Contact your financial
institution for availability, cost, and time frames.
Note: The IRS uses the latest encryption technology to
ensure that the electronic payments you make online, by
phone, or from a mobile device using the IRS2Go app are
safe and secure. Paying electronically is quick and easy.
What if I can’t pay now? Go to IRS.gov/Payments for
more information about your options.
• Apply for an online payment agreement (IRS.gov/
OPA) to meet your tax obligation in monthly install-
ments if you can’t pay your taxes in full today. Once
you complete the online process, you will receive im-
mediate notification of whether your agreement has
been approved.
• Use the Offer in Compromise Pre-Qualifier to see if
you can settle your tax debt for less than the full
amount you owe. For more information on the Offer in
Compromise program, go to IRS.gov/OIC.
Filing an amended return. Go to IRS.gov/Form1040X
for information and updates.
Checking the status of your amended return. Go to
IRS.gov/WMAR to track the status of Form 1040-X amen-
ded returns.
Caution: It can take up to 3 weeks from the date you
filed your amended return for it to show up in our system,
and processing it can take up to 16 weeks.
Understanding an IRS notice or letter you’ve re-
ceived. Go to IRS.gov/Notices to find additional informa-
tion about responding to an IRS notice or letter.
IRS Document Upload Tool. You may be able to use the
Document Upload Tool to respond digitally to eligible IRS
notices and letters by securely uploading required docu-
ments online through IRS.gov. For more information, go to
IRS.gov/DUT.
Schedule LEP. You can use Schedule LEP (Form 1040),
Request for Change in Language Preference, to state a
preference to receive notices, letters, or other written com-
munications from the IRS in an alternative language. You
may not immediately receive written communications in
the requested language. The IRS’s commitment to LEP
taxpayers is part of a multi-year timeline that began pro-
viding translations in 2023. You will continue to receive
communications, including notices and letters in English
until they are translated to your preferred language.
Contacting your local TAC. Keep in mind, many ques-
tions can be answered on IRS.gov without visiting a TAC.
Go to IRS.gov/LetUsHelp for the topics people ask about
most. If you still need help, TACs provide tax help when a
tax issue can’t be handled online or by phone. All TACs
now provide service by appointment, so you’ll know in ad-
vance that you can get the service you need without long
wait times. Before you visit, go to IRS.gov/TACLocator to
find the nearest TAC and to check hours, available serv-
ices, and appointment options. Or, on the IRS2Go app,
under the Stay Connected tab, choose the Contact Us op-
tion and click on “Local Offices.”
————————————————————————
Below is a message to you from the Taxpayer Advocate
Service, an independent organization established by Con-
gress.
The Taxpayer Advocate Service (TAS)
Is Here To Help You
What Is the Taxpayer Advocate Service?
The Taxpayer Advocate Service (TAS) is an independent
organization within the Internal Revenue Service (IRS)
that helps taxpayers resolve problems with the IRS,
makes administrative and legislative recommendations to
prevent or correct the problems, and protects taxpayer
rights. We work to ensure that every taxpayer is treated
fairly and that you know and understand your rights under
the Taxpayer Bill of Rights. We are Your Voice at the IRS.
How Can TAS Help Me?
TAS can help you resolve problems that you haven’t been
able to resolve with the IRS on your own. Always try to re-
solve your problem with the IRS first, but if you can’t, then
come to TAS. Our services are free.
• TAS helps all taxpayers (and their representatives), in-
cluding individuals, businesses, and exempt organiza-
tions. You may be eligible for TAS help if your IRS
problem is causing financial difficulty, if you’ve tried
and been unable to resolve your issue with the IRS, or
if you believe an IRS system, process, or procedure
just isn’t working as it should.
• To get help any time with general tax topics, visit
www.TaxpayerAdvocate.IRS.gov. The site can help
you with common tax issues and situations, such as
what to do if you make a mistake on your return or if
you get a notice from the IRS.
• TAS works to resolve large-scale (systemic) problems
that affect many taxpayers. You can report systemic is-
sues at www.IRS.gov/SAMS. (Be sure not to include
any personal identifiable information.)
30 Publication 571 (1-2026)
How Do I Contact TAS?
TAS has offices in every state, the District of Columbia,
and Puerto Rico. To find your advocate's number:
• Go to www.TaxpayerAdvocate.IRS.gov/Contact-Us;
• Check your local directory, or
• Call TAS toll free at 877-777-4778.
What Are My Rights as a Taxpayer?
The Taxpayer Bill of Rights describes ten basic rights that
all taxpayers have when dealing with the IRS. Go to
www.TaxpayerAdvocate.IRS.gov/Taxpayer-Rights for
more information about the rights, what they mean to you,
and how they apply to specific situations you may encoun-
ter with the IRS. TAS strives to protect taxpayer rights and
ensure the IRS is administering the tax law in a fair and
equitable way.
Publication 571 (1-2026) 31
To help us develop a more useful index, please let us know if you have ideas for index entries.
See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.Index
403(b) account 3
403(b) plans:
Basics 3
Benefits 3
Participation 4
Self-employed ministers 4
What is a 403(b) plan? 3
Who can set up a 403(b)
account? 4
A
After-tax contributions 4
Assistance (See Tax help)
B
Basics 3
Benefits 3
C
Catch-up contributions 17
Chaplain 4
Church employees 16
Years of service 16
Contributions 4
After-tax 4
Catch-up 17
Elective deferrals 4, 5
Nonelective 4
Reporting 5
Correcting excess contributions 17
Credit, for retirement savings
contributions 26
D
Distributions 18
10-year tax option 19
90-24 transfer 19
Deceased employees 22
Direct rollover 22
Eligible retirement plans 21
Frozen deposit 22
Gift tax 22
Minimum required 19
Qualified domestic relations
order 22
Rollovers 20
Second rollover 22
Transfers 19
E
Elective deferrals 4, 5
Eligible employees 4, 12
Employer's annual work period 12
Excess contributions 17
Correcting 17
Determining 17
Excess amounts 18
Excess deferrals 18
Excess elective deferral 18
Excise tax 18
Excise tax:
Excess contributions 18
Reporting requirement 18
F
Full-time or part-time 11
G
Gift tax 22
I
Incidental life insurance 7
Includible compensation 7
403(b) plan 16
Figuring 9
Foreign missionaries 16
Incidental life insurance 7
Self-employed ministers 16
Includible compensation for your
most recent year of service:
Definition 6
L
Limit on annual additions 6
Limit on elective deferrals 11
15-year rule 11
Figuring 14
General limit 11
M
MAC (See Maximum amount
contributable)
Maximum amount contributable 5
Components 5
How to figure MAC 5
When to figure MAC 6
Minimum required distributions 19
Ministers 4, 16
Missing children 2
Most recent year of service 6
Most recent year of service,
figuring 6
N
Nonelective contributions 4, 5
P
Pre-tax contributions 7, 10, 20, 24
Publications (See Tax help)
Q
qualified birth or adoption 18
qualified birth or adoption
distribution 20
Qualified domestic relations
order 22
R
Reporting contributions:
Chaplains 5
Reporting Contributions:
Self-employed ministers 5
Required distributions 19
retirement income accounts 3, 5
Retirement savings contributions
credit 1, 26
Rollovers 18, 20
Roth contribution program 11
S
Salary reduction agreement 11
Self-employed ministers 4, 5, 12, 16
T
Tax help 27
Transfers 19
90-24 transfer 19
Conservatorship 19
Direct-trustee-to-trustee 20
Insolvency 19
Permissive service credit 20
V
Voluntary deductible
contributions 22
W
What is a 403(b) plan? 3
Y
Years of service 11
Church employees 12, 16
Definition 12
Employer's annual work period 12
Full year of service 13
Full-time employee for the full
year 12
Full-time for part of the year 13
Other than full-time for the full
year 13
Part-time for the full year 13
Part-time for the part of the year 13
Self-employed minister 16
Total years of service 12
32 Publication 571 (1-2026)