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

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Teacher's Years of Service

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 employer. 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 organizations 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-exempt organization that is an eligible employer.

Total years of service. When figuring prior years of service, figure each year individually and then add the individual years of service to determine your total years of service.

Example. The annual work period for full-time teachers 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.

Table 4-1.

Note: This table shows how the teacher figures the years of service, as explained in the previous example.

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 annual 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 service in a 12-month period.

Example. All full-time teachers at ABC Public Schools are required to work both the September through December 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 calendar 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 reasonably 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.

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In determining whether positions with the same employer are the same, consider all of the facts and circumstances concerning the positions, including the work performed, the methods by which pay is determined, and the descriptions (or titles) of the positions.

Example. An assistant professor employed in the English 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 English at that university who get most of their pay from that position.

If no one else works for your employer in the same position, 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 period at a university consists of the fall and spring semesters, an instructor at that university who teaches these semesters 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 fraction 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 local college for the 4 months of the 2025 spring semester (February 2025 through May 2025). The annual work period for the college is 8 months (February through May and July through October). Given these facts, the instructor was employed full-time for part of the annual work period and provided ¹ /2 of a year of service. The instructor’s years of service computation for 2025 is as follows.

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.

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 period 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.

Number of hours worked per week

Number of hours per week considered

full-time

3

1

=

9 = 3

Number of months worked

Number of months in annual work

period

4

1

=

8 = 2

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Attorney’s first fraction

Number of semesters worked

=

1

Number of semesters in annual work period 2

Attorney's second fraction

Number of hours worked per week

3

1

12 = 4

Number of hours per week considered

full-time

=

The attorney would multiply these fractions to obtain the fractional year of service.

1 x

1

1

2 4 8