The IRS has released a draft of the updated version of Publication 571, “Tax-Sheltered Annuity Plans (403(b) Plans) for Employees of Public Schools and Certain Tax-Exempt Organizations.” 
Publication 571 is intended to help taxpayers better understand the tax rules that apply to 403(b) tax-sheltered annuity plans. It covers maximum contribution amounts, excess contributions, the retirement savings contributions credit, and basic rules for distributions and rollovers.
What’s New for 2024
Publication 571 has been adjusted to account for the following changes and developments.
Retirement savings contributions credit. For 2024, the adjusted gross income limitations have increased in the following manner:
- from $73,000 to $76,500 for filers who are married and filing jointly;
- from $54,750 to $57,375 for heads of household; and
- from $36,500 to $38,250 for filers who are single, married filing separately, or are qualifying surviving spouses with dependent children.
Limit on elective deferrals. For 2024, the limit on elective deferrals has increased from $22,500 to $23,000.
Limit on annual additions. For 2024, the limit on annual additions has increased from $66,000 to $69,000.
Distributions for emergency personal expenses. For distributions made after Dec. 31, 2023, an emergency personal expense distribution may be made from a 403(b) plan and is not subject to the 10% additional tax on early distributions.
An emergency personal expense distribution is a distribution made from a 403(b) plan (or other applicable eligible retirement plan) that is used to meet unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses. Certain limits apply for such distributions.
One may repay an emergency personal expense distribution at any time during the 3-year period beginning on the day after the date on which the distribution was received. A participant must roll over distribution amounts received within 60 calendar days in order for the amount to be treated as nontaxable. The repayment of a qualified emergency personal expense distribution from an applicable eligible retirement plan is treated as a direct transfer of the distribution to the plan within 60 days of the distribution.
Distributions to a domestic abuse victim. For distributions made after Dec. 31, 2023, a distribution to a domestic abuse victim may be made from a 403(b) plan and will not be subject to the 10% additional tax on early distributions. A distribution to a domestic abuse victim is a distribution made from a 403(b) plan (or other applicable eligible retirement plan) no greater than $10,000 (indexed for inflation) and made during the 1-year period beginning on any date on which one is the victim of domestic abuse by a spouse or domestic partner.
The rules for repayment of distributions to a domestic abuse victim mirror those for distributions for emergency personal expenses. One may repay this distribution at any time during the 3-year period beginning on the day after the date on which it was received. A participant must roll over distribution amounts received within 60 calendar days in order for the amount to be treated as nontaxable. The repayment of a qualified domestic abuse victim distribution from an applicable eligible retirement plan is treated as a direct transfer of the distribution to the plan within 60 days of the distribution.
The version of Publication 571 that was revised for reporting about 2022 is here.
The draft of the version of Publication 571 for use in reporting about 2023 is here.
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