Table of Contents
Self-employed ministers and church employees who participate in 403(b) plans generally follow the same rules as other 403(b) plan participants.
This means that if you are a self-employed minister or a church employee, your MAC generally is the lesser of:
Your limit on annual additions, or
Your limit on elective deferrals.
For most ministers and church employees, the limit on annual additions is figured without any changes. This means that if you are a minister or church employee, your limit on annual additions generally is the lesser of:
$53,000 for 2016 and $54,000 for 2017, or
Your includible compensation for your most recent year of service.
Although, in general, the same limit applies, church employees can choose an alternative limit and there are changes in how church employees, foreign missionaries, and self-employed ministers figure includible compensation for the most recent year of service. This chapter will explain the alternative limit and the changes.
If you are a church employee, you can choose to use $10,000 a year as your limit on annual additions, even if your annual additions figured under the general rule is less.
Total contributions over your lifetime under this choice can’t be more than $40,000.
There are two types of changes in determining includible compensation for the most recent year of service. They are:
Changes in how the includible compensation of foreign missionaries and self-employed ministers is figured, and
A change to the years that are counted when figuring the most recent year of service for church employees and self-employed ministers.
Includible compensation is figured differently for foreign missionaries and self-employed ministers.
You are an employee of a church or convention or association of churches.
You are performing services for the church outside the United States.
Generally, only service with the employer who maintains your 403(b) account can be counted when figuring your limit on annual additions.
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