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March 22, 2009

Annual Addition

Your Guide



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 :

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.


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