0821 Publ 4482 (PDF)

Official source: IRS Forms, Instructions & Publications (https://www.irs.gov/pub/irs-pdf/p4482.pdf), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

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contributions or a combination of both.

403(b) plans offer significant tax advantages for participants:

• contributions and earnings are tax-deferred (in a traditional 403(b) annuity),

• earnings on after-tax Roth contributions may be tax-free,

• you may be eligible for a saver’s credit on your individual tax return, and

• you can carry your annuity with you when you change employers or retire.

Be aware of common mistakes.

As a participant in a 403(b) plan, you need to be familiar with the tax rules governing your 403(b) annuity so you can:

• maximize your retirement benefits,

• comply with the law, and

• avoid additional taxes and penalties.

*Unless otherwise stated, references to 403(b) annuities in this publication will generally also apply to 403(b) custodial accounts.

Plan Feature 403(b) Requirements

Eligible participants - all common-law employees of public school systems and 501(c)(3) organizations

General contribution limits - for elective deferrals

• $19,500 (in 2021, indexed for inflation)

• for employer and employee contributions (see 403(b) Contribution Limits )

• $58,000 (for 2021, indexed for inflation), or

• 100% of includible compensation, if less

15-years-of-service catch-up contributions* ^#

• available for certain employers (such as schools, hospitals and churches)

• employee must have 15 years of service

• limited to least of:

• $3,000,

• $15,000 less previously excluded special catch-ups, or

• $5,000 multiplied by years of service minus previously excluded deferrals

Age-50 catch-up contributions ^# - additional $6,500 (in 2021, indexed for inflation)

Loans ^# - Generally limited to the lesser of:

• $50,000, or

• 50% of the participant’s vested account balance

• payments at least quarterly

• term of no more than 5 years (except for purchase of main home)

• reasonable rate of interest

Other distributions - hardship distributions ^#

• domestic relations order

• distributions to those called to active duty in the military

Timing of distributions - elective deferrals are generally available at:

• death,

• age 59½,

• severance from employment, or

• disability

• you must begin receiving distributions no later than the later of retirement or

age 72 (or 70½ if born before July 1, 1949)

• employer contributions may be available earlier if provided in the plan and

your annuity (but not if the funds are held in a custodial account)

Rollovers - permitted to and from other retirement plans (such as a 401(k) or other 403(b)) and IRAs

• must satisfy eligible distribution rules

Transfers/Exchanges ^# - transfers to another 403(b) plan are permitted

• permitted to and from two annuity contracts or custodial accounts within the

same 403(b) plan

*The special 403(b) 15-years-of-service catch-up is included in the general limit, but the age-50 catch-up is excluded from this limit. Catch-up contributions must be applied first to the 15-years-of-service catch-up, if available, before being applied to the age-50 catch-up. See 403(b) Contribution Limits for examples of how the ordering works.

#Available if both the plan and your specific annuity permit.

change an existing deferral election at least once a year.

Contribution limits and catch-ups. Contributions must stay under the age-50 catch-up and

April 15 of the following taxable year to avoid additional taxes and penalties.

Depositing elective deferrals. Your employer must send your deferrals to your annuity issuer as soon as is reasonable for proper plan administration (but no later than 15 days following the month you would have been paid).

Rollovers. You’re permitted to roll over any part of your otherwise taxable eligible distribution* from a 403(b) annuity into another 403(b) annuity, 457(b) plan, traditional IRA or other eligible retirement plan. Likewise, if permitted by the 403(b) annuity, you may roll over your otherwise taxable distributions from another retirement plan into your 403(b) annuity. Distributions not properly rolled over are includible in your gross income and a 10% additional tax may apply.

Loans. Loans may be available under the 403(b) plan and your 403(b) annuity. If you default on your loan or it fails other conditions, the IRS may treat your loan as a taxable distribution. Your loan may continue to accrue interest until you’re eligible for a distribution to pay the loan back. If you’re under age 59½ when your loan is deemed a distribution, a 10% additional tax may apply.

Hardship. Hardship distributions may be permitted under your 403(b) plan and your 403(b) annuity. Hardships must be due to an immediate and heavy financial need and must be limited to the amount necessary to satisfy that need. If these conditions aren’t met, you may be required to repay the amounts that don’t meet the hardship requirements of the plan or the law.

*Otherwise taxable eligible distributions don’t include required minimum distributions.

mistakes timely, you can avoid additional taxes and penalties that may affect both you and your employer.

For assistance or information on retirement plan tax-related issues:

• visit our 403(b) page and our 403(b) FAQ page

• call 877-829-5500 – Tax Exempt and Government Entities Customer Account Services

The following publications cover 403(b) annuities:

• Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations

• Publication 575, Pension and Annuity Income

• Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs)

• Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)

• Publication 4483, 403(b) Tax-Sheltered Annuities for Sponsors

• Publication 4546, 403(b) Plan Checklist

Publication 4482 (Rev. 8-2021) Catalog Number 47242K Department of the Treasury Internal Revenue Service www.irs.gov