Question

I rolled over vacation pay into a 457 plan but they sent me a W-2. do I show this as income?

Forum|Forum|5 years ago
February 12, 2021
1 reply
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I also received a full year of pension money on a 1099-R

TurboTax Premier Online

Distributions from a 457 plan are considered compensation and are reported on form W-2. See below.

If your work for state or local government or a tax-exempt organization, you may benefit from a 457 plan. This is a retirement savings plan that offers many of the same features as the 401(k) plan for private-sector employees. Distributions from a 457 are considered part of your compensation, and your employer reports them to the Internal Revenue Service accordingly.

Employers report any distribution from a 457 plan on Form W-2, the annual Wage and Tax Statement that arrives each January for payments made in the previous year. The amount of the distribution appears in Box 11, "Nonqualified Plans." The amount is also included in your gross wages that go in Box 1.

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D

dmertz

Employee

JamesG1's answer applies to distributions from non-governmental 457(b) plans. Governmental 457(b) plans report distributions on Forms 1099-R. Neither would have anything to do with rolling over vacation pay into a 457(b) plan.

I'm not sure what you mean by "rolled over vacation pay into a 457(b) plan." That money would have to have been contributed to the plan from your pay by your employer withholding that money and depositing it into the 457(b) account. Many plans do not permit retirement contributions to be made from vacation pay, so it's not clear that that is what actually happened. If that is what happened, this compensation is still required to be reported on Form W-2 and shown in box 12 with code G (traditional) or code EE (Roth), with the amount reported in box 1 having been reduced by the amount reported with code G.