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Practice Management

Includible Compensation for the Most Recent Year of Service

Q. What is includible compensation for the most recent year of service?

A. Generally, includible compensation for the most recent year of service is the amount of taxable wages and benefits received from the employer that maintained a 403(b) account during the most recent year of service.
When figuring your includible compensation for the most recent year of service, keep in mind that the most recent year of service may not be the same as the employer's most recent annual work period. This can happen if an employee’s tax year isn’t the same as the employer's annual work period.

When figuring includible compensation for the most recent year of service, don’t mix compensation or service of one employer with compensation or service of another employer.