403(b) Plans: Basic Rules for Schools and Tax-Exempt Employers
Published November 7, 2026
Publication 571 (Rev. January 2026), Tax-Sheltered Annuity Plans (403(b) Plans), covers retirement plans for employees of public schools and certain tax-exempt organizations. This guide covers the basic rules for employees with a 403(b) plan. It is general information. It is not advice about your plan or your return.
Types of contributions
The publication lists several types of contributions. They include elective deferrals taken from your pay, employer contributions, Roth contributions, and after-tax contributions. Each type has its own tax rules, so check which type your plan uses. Each type can have its own limit. Some limits apply to the total. The publication explains how the limits fit together.
The 2025 contribution limit
The publication gives a 2025 limit on elective deferrals of $23,500. For 2026, the publication says the limit rose to $24,500. For 2025, it also describes a higher catch-up limit for people who reach ages 60 through 63 during the year. Contributions above the limits are excess contributions, and the publication explains how to identify them.
Roth contributions
If your contributions are designated as Roth contributions, you pay tax on them when you make them. Qualified distributions from a Roth account are not included in income. The publication explains which distributions count as qualified. Check each year's statement. Keep your records.
Withdrawals and the 10% additional tax
Most distributions from a 403(b) plan are taxable when you receive them. Early distributions can also carry a 10% additional tax. The publication lists exceptions. Two examples are a distribution for an emergency personal expense and a distribution to a domestic abuse victim. The rules for each exception must be met.
Your distributions are reported on Form 1099-R. The distribution code in box 7 shows the type of distribution. The publication gives code G as an example for Roth nonelective contributions, so check the code on your form before you file.
Required minimum distributions
Required minimum distributions begin at the age the publication sets. If you do not take a required amount, the excise tax is 25% of the amount you should have taken. The tax drops to 10% if the shortfall is corrected within the time the publication allows.
Who this covers
The publication is written for employees of public schools and certain tax-exempt organizations. These employers can offer 403(b) plans. If your employer offers a different kind of plan, such as a 401(k), the rules in this guide may not match your plan. Start by checking which plan your employer offers. Then read the plan rules. Use the table of contents to find each topic.
The maximum contribution amount
The publication explains the maximum annual contribution, often called the MAC. Your MAC depends on your includible compensation and on your most recent year of service. The publication has worksheets for each part. Your plan may also set its own limits. Ask your plan administrator for the plan rules.
Reporting Roth amounts
The publication says designated Roth nonelective contributions are reported on that year's Form 1099-R. They are reported when allocated to your account. Keep the form with your tax records. Compare the amounts with your plan statements. Ask the plan administrator about any difference.
Rollovers
The publication also covers the basic rules for rollovers from a 403(b) account. Read the distribution and rollover sections before you take money out of a plan. Those sections explain how a rollover is treated. Distributions from 403(b) accounts are covered in more detail in Publication 575.
For related topics, see required minimum distributions, Form 1099-R retirement distributions, and the 10% additional tax and its exceptions.
Upload your documents and answer a few simple questions to start your return.
Sources: Sources: IRS, Publication 571 (Rev. January 2026), Tax-Sheltered Annuity Plans (403(b) Plans) (https://www.irs.gov/pub/irs-pdf/p571.pdf) This is general information, not advice about your specific return.
More guides on: Retirement and pensions
