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The second and final component of MAC is the limit on elective deferrals. This is a limit on the amount of contributions that can be made to your account through a salary reduction agreement.
A salary reduction agreement is an agreement between you and your employer that allows for a portion of your compensation to be directly invested in a 403(b) account on your behalf. You can enter into more than one salary reduction agreement during a year.
More than one 403(b) account. If, for any year, elective deferrals are contributed to more than one 403(b) account for you (whether or not with the same employer), you must combine all the elective deferrals to determine whether the total is more than the limit for that year.403(b) plan and another retirement plan. If, during the year, contributions in the form of elective deferrals are made to other retirement plans on your behalf, you must combine all of the elective deferrals to determine if they are more than your limit on elective deferrals. The limit on elective deferrals applies to amounts contributed to:

401(k) plans, to the extent excluded from income,

Roth contribution programs,

Section 501(c)(18) plans, to the extent excluded from income,

Savings incentive match plan for employees (SIMPLE plans),

Simplified employee pension (SEP) plans, and

All 403(b) plans.
Under the general limit on elective deferrals, the most that can be contributed to your 403(b) account through a salary reduction agreement is $17,500 for 2014 and $18,000 for 2015. This limit applies without regard to community property laws.
If you have at least 15 years of service with an educational organization (such as a public or private school), hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization), the limit on elective deferrals to your 403(b) account is increased by the least of:

$3,000,

$15,000, reduced by the sum of:

The additional pretax elective deferrals made in prior years because of this rule, plus

The aggregate amount of designated Roth contributions permitted for prior years because of this rule, or


$5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years.
If you qualify for the 15year rule (sometimes referred to as the special section 403(b) catchup or the yearsofservice catchup), your elective deferrals under this limit can be as high as $20,500 for 2014 and $21,000 for 2015.
To determine whether you have 15 years of service with your employer, see Years of Service , next.
To determine if you are eligible for the increased limit on elective deferrals, you will first need to figure your years of service. How you figure your years of service depends on whether you were a fulltime or a parttime employee, whether you worked for the full year or only part of the year, and whether you have worked for your employer for an entire year.
You must figure years of service for each year during which you worked for the employer who is maintaining your 403(b) account.
If more than one employer maintains a 403(b) account for you in the same year, you must figure years of service separately for each employer.
For purposes of the 15year rule, years of service are calculated through the year for which the calculation is being made. For example, to determine the limit for 2014, you count years of service through 2014.
Your years of service are the total number of years you have worked as a fulltime employee for the employer maintaining your 403(b) account as of the end of the year.
Take the following rules into account when figuring your years of service.
Example.
The annual work period for fulltime teachers employed by ABC Public Schools is September through December and February through May. Marsha began working with ABC schools in September 2010. She has always worked fulltime for each annual work period. At the end of 2014, Marsha had 4.5 years of service with ABC Public Schools, as shown in Table 41.
Table 41. Marsha's Years of Service
Note. This table shows how Marsha figures her years of service, as explained in the previous example.

Year  Period Worked  Portion of Work Period  Years of Service 

2010  Sept.–Dec.  .5 year  .5 year 
2011  Feb.–May  .5 year  1 year 
Sept.–Dec.  .5 year  
2012  Feb.–May  .5 year  1 year 
Sept.–Dec.  .5 year  
2013  Feb.–May  .5 year  1 year 
Sept.–Dec.  .5 year  
2014  Feb.–May  .5 year  1 year 
Sept.–Dec.  .5 year  
Total years of service  4.5 years 
Example.
All fulltime teachers at ABC Public Schools are required to work both the September through December semester and the February through May semester. Therefore, the annual work period for fulltime teachers employed by ABC Public Schools is September through December and February through May. Teachers at ABC Public Schools who work both semesters in the same calendar year are considered working a full year of service in that calendar year.
Count each full year during which you were employed fulltime as 1 year of service. In determining whether you were employed fulltime, compare the amount of work you were required to perform with the amount of work normally required of others who held the same position with the same employer and who generally received most of their pay from the position.
Example.
An assistant professor employed in the English department of a university will be considered a fulltime employee if the amount of work that he or she is required to perform is the same as the amount of work normally required of assistant professors of English at that university who get most of their pay from that position.
Example.
If a doctor works for a hospital 12 months of a year except for a 1month vacation, the doctor will be considered as employed for a full year if the other doctors at that hospital also work 11 months of the year with a 1month vacation. Similarly, if the usual annual work period at a university consists of the fall and spring semesters, an instructor at that university who teaches these semesters will be considered as working a full year.
If, during any year, you were employed fulltime for only part of your employer's annual work period, parttime for the entire annual work period, or parttime for only part of the work period, your year of service for that year is a fraction of your employer's annual work period.

The numerator (top number) is the number of weeks, months, or semesters you were a fulltime employee.

The denominator (bottom number) is the number of weeks, months, or semesters considered the normal annual work period for the position.
Example.
Jason was employed as a fulltime instructor by a local college for the 4 months of the 2014 spring semester (February 2014 through May 2014). The annual work period for the college is 8 months (February through May and July through October). Given these facts, Jason was employed fulltime for part of the annual work period and provided ½ of a year of service. Jason's years of service computation for 2014 is as follows:
Number of months Jason worked  =  4  =  1 
Number of months in annual work period  8  2 

The numerator (top number) is the number of hours or days you worked.

The denominator (bottom number) is the number of hours or days normally required of someone holding the same position who works fulltime.
Example.
Vance teaches one course at a local medical school. He teaches 3 hours per week for two semesters. Other faculty members at the same school teach 9 hours per week for two semesters. The annual work period of the medical school is two semesters. An instructor teaching 9 hours a week for two semesters is considered a fulltime employee. Given these facts, Vance has worked parttime for a full annual work period. Vance has completed ^{1}/_{3} of a year of service, figured as shown below.
Number of hours per week Vance worked  =  3  =  1 
Number of hours per week considered fulltime  9  3 

The numerator (top number) is the number of weeks, months, or semesters you were a fulltime employee.

The denominator (bottom number) is the number of weeks, months, or semesters considered the normal annual work period for the position.

The numerator (top number) is the number of hours or days you worked.

The denominator (bottom number) is the number of hours or days normally required of someone holding the same position who works fulltime.
Example.
Maria, an attorney, teaches a course for one semester at a law school. She teaches 3 hours per week. The annual work period for teachers at the school is two semesters. All fulltime instructors at the school are required to teach 12 hours per week. Based on these facts, Maria is employed parttime for part of the annual work period. Her year of service for this year is determined by multiplying two fractions. Her computation is as follows:
Maria's first fraction
Number of semesters Maria worked  =  1 
Number of semesters in annual work period  2 
Maria's second fraction
Number of hours Maria worked per week  =  3  =  1 
Number of hours per week considered fulltime  12  4 
Maria would multiply these fractions to obtain the fractional year of service:
1  x  1  =  1  
2  4  8 
You can use Part II of Worksheet 1 in chapter 9 to figure the limit on elective deferrals.
Floyd has figured his limit on annual additions. The only other component needed before he can determine his MAC for 2015 is his limit on elective deferrals.
Floyd's employer will not make any nonelective contributions to his 403(b) account and Floyd will not make any aftertax contributions. Additionally, Floyd's employer does not offer a Roth contribution program.
Floyd has determined that his limit on annual additions for 2015 is $53,000 and his limit on elective deferrals is $18,000. Because elective deferrals are the only contributions made to Floyd's account, the maximum amount that can be contributed to a 403(b) account on Floyd's behalf in 2015 is $18,000, the lesser of both limits.
Table 42. Worksheet 1. Maximum Amount Contributable (MAC)
Note. Use this worksheet to figure your MAC.

Part I. Limit on Annual Additions  
1.  Enter your includible compensation for your most recent year of service  1.  $70,475 
2.  Maximum:

2.  53,000 
3.  Enter the lesser of line 1 or line 2. This is your limit on annual additions  3.  53,000 
Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3 on line 18.  
Part II. Limit on Elective Deferrals  
4.  Maximum contribution:

4.  18,000 
Note. If you have at least 15 years of service with a qualifying organization, complete lines 5 through 17. If not, enter zero (0) on line 16 and go to line 17.  
5.  Amount per year of service  5.  5,000 
6.  Enter your years of service  6.  
7.  Multiply line 5 by line 6  7.  
8.  Enter the total of all elective deferrals made for you by the qualifying organization for prior years  8.  
9.  Subtract line 8 from line 7. If zero or less, enter zero (0)  9.  
10.  Maximum increase in limit for long service  10.  15,000 
11.  Enter the total of additional pretax elective deferrals made in prior years under the 15year rule  11.  
12.  Enter the aggregate amount of all designated Roth contributions permitted for prior years under the 15year rule  12.  
13.  Add lines 11 and 12  13.  
14.  Subtract line 13 from line 10  14.  
15.  Maximum additional contributions  15.  3,000 
16.  Enter the least of lines 9, 14, or 15. This is your increase in the limit for long service  16.  0 
17.  Add lines 4 and 16. This is your limit on elective deferrals  17.  18,000 
Part III. Maximum Amount Contributable  
18. 

18.  $18,000 
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