Contributions to a Retirement Plan

Employee contributions to any retirement plan are always taxable as compensation.

Employer contributions on behalf of an employee to a retirement plan are not considered received at the time of contribution and are not included in the employee’s compensation at the time of contribution.

A self-employed individual or a partner in a partnership is not an employee. Therefore, contributions to a retirement plan by a self-employed individual or by a partnership on behalf of a partner are included in the individual or partner’s income and are not deductible as a business expense.