Save time with our cheat sheets, fact sheets, checklists & books!

March 22, 2009

Annual Addition

Print

Definition

An Annual Addition is the total amount credited to a participant’s account for any limitation year. This includes:

  • Employer contributions;
  • Employee contributions; and
  • Forfeitures.

 See Annual Addition Limit

Referring Cite

Treas. Reg. § 1.415(c)-1(b)

Additional Helpful Information

  • Excess contributions , excess aggregate contributions are included in the annual addition amount, even if distributed
  • The direct transfer of a benefit or employee contributions from a qualified plan to a defined contribution plan does not give rise to an annual addition.
  • Annual addition includes employer contributions credited to the participant’s account for the limitation year 
  • Amounts not treated as annual additions :
More

Keep Learning

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Catch-up Contribution

Definition An additional contribution that can be made to a retirement plan by a participant who is at least age-50 by the end of the

Salary Deferral Contribution

Definition A contribution made pursuant to a participant’s election to have a portion of his/her salary/wages  contributed to his/ her employer sponsored plan  rather than

Be among the first to know when

IRA Rules
Change