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

Self-employed ministers and church employees who participate 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 annual 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 employees can choose an alternative limit and there are changes in how church employees, foreign missionaries, and self-employed ministers figure includible compensation 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 anyone who is an employee of a church or a convention or association of churches, including an employee of a tax-exempt organization controlled by or associated with a church or a convention or association of churches.

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.

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 foreign missionaries and self-employed ministers is figured, and

• A change to the years that are counted when figuring the most recent year of service for church employees and self-employed ministers.

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) account 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 layperson or a duly ordained, commissioned, or licensed minister of a church and you meet both of the following requirements.

• You are an employee of a church or convention or association of churches.

• You are performing services for the church outside the United States.

Self-employed minister. If you are a self-employed minister, you are treated as an employee of a tax-exempt organization that is an eligible employer. Your includible compensation is your net earnings from your ministry minus the contributions made to the retirement plan on your behalf and the deductible portion of your self-employment tax.

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 minister, your years of service include full and part years during which you were self-employed.

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 contributions. 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 contributions.

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 dollar-catch-up limit, which is $11,250 for 2025.

Figuring catch-up contributions. When figuring allowable catch-up contributions, combine all catch-up contributions made by your employer on your behalf to the following 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 increase in elective deferrals and the age 50 catch-up, allocate 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.

If your actual contributions (not including catch-up contributions) 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.

At the end of the year or the beginning of the next year, you should refigure your MAC based on your actual compensation and actual contributions made to your account.

If the actual contributions (not including catch-up contributions) 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.

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 excess, 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.

An excess annual addition is a contribution (not including catch-up contributions) that is more than your limit on annual additions. To determine your limit on annual additions, see chapter 3 (chapter 5 for ministers or church employees).

In the year that your contributions are more than your limit on annual additions, the excess amount will be included in your income.

Excise Tax

If your 403(b) account is a custodial account, and you exceed 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 retirement income account, or to excess deferrals.

You must pay the excise tax each year in which there are excess contributions in your account. Excess contributions can be corrected by contributing less than the applicable limit in later years or by making permissible distributions. 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.

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 permitting 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 writing 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 excess deferral was made.

Note: When April 15 falls on a Saturday, Sunday, or legal 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 contributed and the earnings on the excess deferral will be taxed in the year distributed.

Note: When April 15 falls on a Saturday, Sunday, or legal 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).

Permissible distributions. Generally, a distribution can’t be made from a 403(b) account until the employee:

• Reaches age 59 ¹ /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 investments;

• 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 taxable 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 additional tax on early distributions from retirement plans.

Retired public safety officers. If you are an eligible retired 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 coverage by an accident or health plan, or a long-term care insurance 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 ambulance crew.

For additional information, see Pub. 575.

Distribution for active reservist. The 10% additional tax for early withdrawals won’t apply to a qualified reservist distribution attributable to elective deferrals from a 403(b) plan. A qualified reservist distribution is a distribution that is made:

• To an individual who is a reservist or national guardsman and who was ordered or called to active duty for a period in excess of 179 days or for an indefinite period, 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.

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 December 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 accruals 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.

A distribution from a 403(b) plan doesn’t qualify as a lump-sum distribution. This means you can’t use the special 10-year tax option to figure the taxable portion of a 403(b) distribution. For more information, see Pub. 575.

Contract exchanges. If you transfer all or part of your interest from a 403(b) contract to another 403(b) contract (held in the same plan), the transfer is tax free, and is referred 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 employer’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 interest must be subject to the same or stricter distribution restrictions. Finally, your accumulated benefit after the exchange must be equal to what it was before the exchange.

Transfers that don’t satisfy this rule are plan distributions 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 transfer. Both the initial plan and the receiving plan must provide 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 maximum permitted by the state.

• Reinvest the cash distribution in a single policy or contract issued by another insurance company or in a single custodial account subject to the same or stricter distribution restrictions as the original contract not later than 60 days after you receive the cash distribution.

• 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 receive 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 distribution 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 defined benefit governmental plan only if you voluntarily contribute 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 benefit 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.

You can generally roll over tax free all or any part of a distribution from a 403(b) plan to a traditional IRA or a non-Roth eligible retirement plan, except for any nonqualifying 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 taxable income in the year of the distribution from your 403(b) account. See Pub. 590-A for more information about conversion 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 applicable eligible retirement plan is treated as a direct transfer of the distribution to the plan within 60 days of the distribution.

Rollovers to and from 403(b) plans. You can generally roll over tax free all or any part of a distribution from an eligible 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 income if no rollover occurred). This means that if you roll over an amount that is at least as much as the pre-tax portion of the distribution, you don’t have to include any of the distribution in income.

For more information on rollovers and eligible retirement 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 beyond 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 behalf 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 period (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 institution 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 contribution 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 certification 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 procedures outlined in Revenue Procedure 2003-16, as modified by Revenue Procedure 2016-47 and Revenue Procedure 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 circumstances, 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, hospitalization, incarceration, serious illness, restrictions imposed by a foreign country, or postal error;

• Whether you used the amount distributed; and

• How much time has passed since the date of the distribution.

Note: The IRS can waive only the 60-day rollover requirement and not the other requirements for a valid rollover 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 considered 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 expectancy;

• 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 excess deferrals, and any income allocable to the excess, 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 directly to a traditional IRA, Roth IRA, or new plan. Before you receive a distribution, your plan will give you information on this. It is generally to your advantage to choose this option because your plan won’t withhold tax on the distribution if you choose it.

Distribution received by you. If you receive a distribution 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 period 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 distribution of all or part of the accumulated deductible contributions may be rolled over if it otherwise qualifies as a distribution 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 contributions; and

2. Distributions from the contributions, income, or gain.

Excess employer contributions. The portion of a distribution from a 403(b) plan transferred to a traditional IRA that was previously included in income as excess employer 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 contribution limits and may create an excess IRA contribution subject 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 rollover 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 employee. You can roll over your interest in the plan to a traditional 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 treatment for the distribution.

Second rollover. If you roll over a qualifying distribution 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 distribution,

• 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 institution. The 60-day period can’t end earlier than 10 days after 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 insolvent.

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 deduction.

More information. For information on the gift tax, see Pub. 559, Survivors, Executors, and Administrators.

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 compensation, 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 beginning 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 figures, you will need to check the amount contributed during the year to determine if contributions are more than your 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 estimate. By doing this, you will be able to determine if contributions to your 403(b) account should be increased or decreased for the year.

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 contributed is more than the allowable amounts, and possibly avoid additional taxes.

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).

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.

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.

Publication 571 (1-2026) Chapter 9 Worksheets 23

Worksheet B. Includible Compensation for Your Most Recent Year of Service ¹

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 service ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 C. 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.

24 Chapter 9 Worksheets Publication 571 (1-2026)

Worksheet 1. Maximum Amount Contributable (MAC) Note: Use this worksheet to figure your MAC.