Section 401 K

In the united states a 401 k plan is an employer sponsored defined contribution pension account defined in subsection 401 k of the internal revenue code.
Section 401 k. Distributions including earnings are includible in taxable income at retirement except for qualified distributions of designated roth accounts. Elective salary deferrals are excluded from the employee s taxable income except for designated roth deferrals. Employee funding comes directly off their paycheck and may be matched by the employer.
There are several types of 401 k plans available to employers traditional 401 k plans safe harbor. 401 k plan overview tax advantages. The employee and employer can.
Employer contributions are deductible on the employer s federal income tax return to the extent that the. A 401 k is a feature of a qualified profit sharing plan that allows employees to contribute a portion of their wages to individual accounts. Employers can contribute to employees accounts.