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March 26, 2025
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Are pension contributions after-tax contributions or before ?

  • March 26, 2025
  • 2 replies
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are deductions from pay made to pensions typically after-tax cotributions?
Best answer by dmertz

Deductions from your pay that are used to fund a defined benefit pension plan are generally after-tax contributions to the plan.  As such they are not subtracted from the amount reported in box 1 of your W-2 and are not listed in box 12 of your W-2.  They are also not deductible anywhere on your tax return.  When you eventually received distributions from the pension, some portion of the distributions will be nontaxable investment in the contract.

2 replies

March 26, 2025

No, they would typically be before-tax contributions. As such, they will be subtracted from your wage income reported in box 1 on your W-2 form. So, that portion of your wage income is not taxed. Thus, they are "before-tax" contributions.

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dmertzAnswer
Employee
March 26, 2025

Deductions from your pay that are used to fund a defined benefit pension plan are generally after-tax contributions to the plan.  As such they are not subtracted from the amount reported in box 1 of your W-2 and are not listed in box 12 of your W-2.  They are also not deductible anywhere on your tax return.  When you eventually received distributions from the pension, some portion of the distributions will be nontaxable investment in the contract.