Deferred Compensation Plan For Highly Compensated Employees In Pennsylvania
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FAQ
Retirement income is not taxable: Payments from retirement accounts like 401(k)s and IRAs are tax exempt. PA also does not tax income from pensions for residents aged 60 and over. Social Security income is not taxable: Just like with a pension, in Pennsylvania, Social Security is tax exempt.
Q: Are IRA's and 401K's taxable? A: They are fully taxable if the decedent was over the age of 59 1/2.
Elective deferral limit The amount you can defer (including pre-tax and Roth contributions) to all your plans (not including 457(b) plans) is $23,000 in 2024 ($22,500 in 2023; $20,500 in 2022; $19,500 in 2020 and 2021; $19,000 in 2021).
When you contribute to your pre-tax 401k or IRA, you may reduce your taxable income or receive a federal income tax deduction, but your Pennsylvania state income will not be reduced. Thus, you are deferring your federal income tax but paying your Pennsylvania income tax in the year of contribution.
About Your Deferred Compensation Plan. Your "deferred comp plan" offers a simple, flexible way for you to save for retirement. With its powerful pretax savings features, investment options and planning resources, you can work toward replacing your working income in retirement — for life.
Dipping into a 401(k) or 403(b) before age 59 ½ usually results in a 10% penalty.
Are pensions or retirement income taxed in Pennsylvania? Retirees get a reprieve from income tax because pensions, 401(k) and 403(b) plans and IRAs are exempt from tax. AARP's Retirement Calculator can help you determine if you are saving enough to retire when — and how — you want.
