Tax Sheltered Annuities

  • Credits: 4
  • Format: Self-Study eBook
  • Field of Study: Federal Tax Law
  • Author/Speaker: Paul Winn
Available Formats:
Advanced Preparation: None
Experience Level: Overview
Program Prerequisites: General Understanding of Taxes
Course ID: EWTFM-T-01938-22-S | 6233-CE-0699
Published Date: Jan 2022


Tax Sheltered Annuity Plans discusses the personal retirement savings plan available to employees of certain non-profit organizations and public schools under §403(b) of the Internal Revenue Code. The course begins with an examination of both employer and participant eligibility. The general limits on contributions are examined, and the special catch-up contributions are considered. The nature of the salary reduction agreement is discussed.

The rules governing premature and required distributions are discussed, and the limits applicable to participant loans from tax-sheltered annuities are considered. The maximum loan repayment schedules are addressed, and the consequences of loan default are explained.

Topics include:
  • Estate and gift tax (on the designation of an irrevocable beneficiary) rules
  • The income tax treatment of plan contributions and distributions is examined
  • Premature distributions and exceptions to the 10% tax penalty
  • Mandatory 20% withholding on certain lump-sum distributions
  • Permitted tax-sheltered annuity investments are discussed
  • The term “annuity,” when used in a 403(b) plan includes incidental life insurance, a fixed annuity, or a variable annuity
  • Custodial accounts may be used to fund tax-sheltered annuity accounts
  • Through custodial accounts, a participant may purchase redeemable shares in an open-end mutual fund
  • Various plan requirements
  • Participation, coverage, and nondiscrimination requirements
  • Non-forfeitability requirements
  • Distribution requirements

Learning Objectives:

After reading the course material, you will be able to:

  • The tax-sheltered annuity plan rules concerning the eligibility of participants, eligibility of employers, contribution levels, and tax treatment of contributions.
  • The rules governing catch-up provisions and the increase permitted to the limit on elective deferrals.
  • The benefits of tax-deferred accumulation.
  • The nature of and limitations as to permissible tax-sheltered annuity funding vehicles.
  • The rules governing tax-sheltered annuity distributions, loans and rollovers, and their tax treatment.
  • The general tax-sheltered annuity plan requirements.

Who Should Attend:
  • All Certified Public Accountants (CPAs)
  • Enrolled Agents (EAs)
  • Tax Return Preparers (TRPs)

Qualifies and Approved with all State Boards of Accountancy and the following sponsorship’s: