Do 403(b) plan contributions count towards the Retirement Savings Contribution Credit?

By | September 27, 2013

It looks like additional elective 403b plan contributions will lower a taxpayer’s AGI for 2013 correct?

One of the big advantages to dropping below 34,500 AGI (married filing joint) would be that the Retirement Savings Contribution Credit would be 50% instead of 20% of contributions. Taxpayers often just contribute to their ROTH IRA before April 15 to get the max credit. But if  they can electively contribute to my 403b throughout the year (employer already puts in 10%) then that would kill 2 (or 3) birds with one stone–effectively lowering AGI, building towards the credit and allowing them to receive more in retirement savings credit.


There are even some additional ways to lower AGI:

  • traditional Ira
  • HSA contribution if you have a high deductible health plan
  • student loan interest adjustment
  • tuition and fees adjustment might be better for you in this case than an education credit (if applicable)