IRC §403 · 26 U.S.C. §403
IRC §403: 403(b) Tax-Sheltered Annuities
IRC §403(b) is the 401(k) of public schools, nonprofits, and churches — elective deferrals with the same indexed caps plus a 15-year-service catch-up the corporate world doesn’t get.
What it governs
- Available to 501(c)(3)s, public schools, and ministers — not for-profits
- Elective-deferral caps matching 401(k), plus a 15-year-service catch-up
- Universal availability: every employee must be allowed to defer, with narrow exceptions
- Church and small-plan alternatives with lighter nondiscrimination burdens
In the GuideFull treatment in Chapter 21 of the Guide — THE TAX CUTTERY® Guide to Federal Income Taxation, Professional Edition (564 pages, 24 chapters).
Related sectionsIRC §401 — the corporate plan it mirrors · IRC §457 — often offered alongside at the same employer
From the practiceStart the consultation — Paul on video, one question at a time →
Questions this section answers
- 403(b) vs 401(k) — what’s different?
- Mostly the employer and the extras: 403(b)s add a 15-year-service catch-up on top of the standard caps, and universal availability replaces most nondiscrimination testing. Investments skew annuity-heavy by history, not by law.
- What is the 15-year catch-up?
- Long-tenured school and nonprofit staff (15+ years with one employer) may defer extra thousands annually, lifetime-capped. It stacks with the age-50 catch-up — the order of operations matters, and payroll often gets it wrong.
- Can I roll a 403(b) into an IRA?
- Yes — 403(b) balances roll to IRAs, 401(k)s, and 457(b)s like any qualified money. Non-Roth dollars stay pre-tax through the rollover; Roth 403(b) dollars need a Roth destination.
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The Guide treats 149 Code sections across 24 chapters — every claim verified against primary sources.
Get the Guide — $299