How Contributions Can Be Made to a 403(b) Account

Q. How can contributions be made to a 403(b) account?

A. Generally, only an employer can make contributions to a 403(b) account. However, some plans will allow an employee to make after-tax contributions (defined below).

The following types of contributions can be made to 403(b) accounts.

Elective deferrals. These are contributions made under a salary reduction agreement. This agreement allows an employer to withhold money from a paycheck to be contributed directly into a 403(b) account. 

Nonelective contributions. These are employer contributions that aren’t made under a salary reduction agreement. Nonelective contributions include matching contributions, discretionary contributions, and mandatory contributions made by an employer. 

After-tax contributions. These are contributions (that aren’t Roth contributions) made with funds that one must include in income on a tax return. A salary payment on which income tax has been withheld is a source of these contributions. If a plan allows one to make after-tax contributions, they aren’t excluded from income and cannot be deducted on a tax return.

A combination of any of the three contribution types listed above.