Employer contributions to private, qualified employee pension plans are deductible by the employer up to certain amounts and are not included in the income of the employees. Income earned by the invested funds is not currently taxable to the employees. Benefits in excess of any employee contributions previously taxed by Massachusetts are taxable when paid out. The value of the tax deferral on contributions and on the investment income is a tax expenditure.
Origin: IRC §§ 401-415 in effect January 1, 1985 and M.G.L. c. 62 §§ 2(a)(2)(F)
Tax Type
Tax Expenditure
Item Number
Item Name
Description
Origin
FY2020
FY2021
FY2022
FY2023
FY2024
Personal Income Tax
Deferrals of Gross Income
1.101
Net Exemption of Employer Contributions and Earnings of Private Pension Plans
Employer contributions to private, qualified employee pension plans are deductible by the employer up to certain amounts and are not included in the income of the employees. Income earned by the invested funds is not currently taxable to the employees. Benefits in excess of any employee contributions previously taxed by Massachusetts are taxable when paid out. The value of the tax deferral on contributions and on the investment income is a tax expenditure.
IRC §§ <a href="https://www.law.cornell.edu/uscode/text/26/401" target="_blank">401</a>-<a href="https://www.law.cornell.edu/uscode/text/26/415" target="_blank">415</a> in effect January 1, 1985 and M.G.L. <a href="https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62/Section2" target="_blank">c. 62 §§ 2(a)(2)(F)</a>
2,284.9
2,569.8
2,963.5
3,367.0
3,794.7
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