Rollovers to Roth IRA. Beginning January 1, 2008, distributions from tax-qualified retirement plans and tax-sheltered annuities can be converted by making a rollover into a Roth IRA subject to the restrictions that currently apply to rollovers from a traditional IRA into a Roth IRA.

Retirement savings contribution credit. For 2008, the adjusted gross income limitations have increased from $52,000 to $53,000 for married filing jointly filers, from $39,000 to $39,750 for head of household filers, and from $26,000 to $26,500 for single, married filing separately, or qualifying widow(er) with dependent child filers. See chapter 10, Retirement Savings Contribution Credit, on page 19, for additional information.

Limit on elective deferrals. For 2008, the limit on elective deferrals remains unchanged at $15,500.

Limit on annual additions. For 2008, the limit on annual additions has increased from $45,000 to $46,000.

Temporary waiver of the minimum required distribution. For calendar year 2009, there is a temporary waiver of the required minimum distribution from a 403(b) plan. See Minimum Required Distributions in chapter 8, for more information.

Retirement savings contribution credit. For 2009, the adjusted gross income limitations have increased from $53,000 to $55,500 for married filing jointly filers, from $39,750 to $41,625 for head of household filers, and from $26,500 to $27,750 for single, married filing separately, or qualifying widow(er) with dependent child filers. See chapter 10, Retirement Savings Contribution Credit, on page 19, for additional information.

Limit on elective deferrals. For 2009, the limit on elective deferrals has increased from $15,500 to $16,500.

Limit on annual additions. For 2009 the limit on annual additions has increased from $46,000 to $49,000.

Final regulations. Final income tax regulations pertaining to tax-sheltered annuities within the meaning of section 403(b) of the Internal Revenue Code will, generally, be effective for tax years beginning after December 31, 2008. For more information, see T.D. 9340, which is on page 487 of Internal Revenue Bulletin 2007-36 at www.irs.gov/pub/irs-irbs/irb07–36.pdf.

Rollovers by nonspouse beneficiaries. For distributions after December 31, 2006, a nonspouse beneficiary may make a direct rollover of a distribution from an eligible retirement plan of a deceased participant if the rollover is a direct transfer to an inherited IRA established to receive the distribution. The transfer will be treated as an eligible rollover distribution and the receiving individual retirement plan will be treated as an inherited individual retirement account or annuity.

Rollover of after-tax contributions. For tax years beginning after December 31, 2006, participants in a 403(b) plan can roll over after-tax contributions to an eligible retirement plan, and roll over after-tax contributions from an eligible retirement plan into a 403(b) plan, if the rollover is made through a direct trustee-to-trustee transfer.

Retired public safety officers. For tax years beginning after December 31, 2006, if you are an eligible retired public safety officer, distributions of up to $3,000, made directly from your 403(b) plan to pay accident, health, or long-term care insurance are not included in your taxable income. The premiums can be for you, your spouse, or your dependents.A public safety officer is a law enforcement officer, fire fighter, chaplain, or member of a rescue squad or ambulance crew.For additional information, see Publication 575, Pension and Annuity Income.

90-24 Transfer. After September 24, 2007, you may no longer make a 90-24 transfer without your employer's involvement.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

This publication can help you better understand the tax rules that apply to your 403(b) (tax-sheltered annuity) plan.

In this publication, you will find information to help you:

This publication does not provide specific information on the following topics.