IRS PLR: Employee Plan Meets Requirements for Eligible Deferred Compensation Plan, Deferred Taxation of Income (IRC §457)

The IRS ruled that (1) a city’s employee benefit plan (including a trust holding the assets) is an eligible deferred compensation plan as defined in tax code Section 457(b) and the regulations thereunder; (2) deferred amounts will be includible under Section 457(a)(1)(A) in recipients’ gross income for the taxable year paid to them; (3) qualified distributions from a qualified Roth account maintained pursuant to the plan will not be includible in gross income under Section 402A(d)(1); (4) eligible rollover distribution amounts will not be includible in gross income for the taxable year in which paid as ...