Advanced Underwriting Consultants

Question of the Day – May 25

Ask the Experts!

The professionals at Advanced Underwriting Consultants (AUC) answer the tax questions posed by producers.  Here’s the question of the day.

Question: Will an employee’s deferral contributions to a 403b plan reduce her potential Social Security retirement income?

Answer: No.

While employee deferral contributions are not generally subject to income taxes, they are subject to Social Security taxes.  Employer contributions are not subject to Social Security taxes.

Since deferrals are subject to FICA taxes, they are part of the taxpayer’s Social Security wage base upon which retirement benefits are based.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.