New Jersey Tax Division Issues Income Tax Information on Treatment of Post-Retirement Contributions to Retirement Plans

The New Jersey Tax Division Dec. 4 issued updated information about the treatment of post-retirement contributions made by an employer to a former employee’s Internal Revenue Code section 403(b) retirement plan, for income tax purposes. The guidance includes: 1) employers can make post-retirement contributions to a 403(b) plan up to five years after an employee’s retirement; 2) the contributions are not subject to federal tax when they are made to the plan, but they are taxable when they are withdrawn by the employee; 3) state law does not allow deferring the tax on contributions made by an employer to these ...