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How are salary deferral contributions treated for tax purposes?

April 26, 2017contributions deferral purposes salary tax treated

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How are salary deferral contributions treated for tax purposes?

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The amount that is contributed to the SIMPLE plan is excluded from the employee’s gross income and is not included as federal taxable wages on the employee’s Form W-2. Salary deferral contributions are subject to Social Security (FICA) and federal unemployment insurance (FUTA) taxes and must be reported on Form W-2.