Tax Benefits (PSE)

The tax benefits of participating in the RIC 457 plan differ depending on whether you elect for your deductions to be taken from your paycheck before or (if your employer plan allows Roth contributions) after taxes.

Saver's Tax Credit

Did you know a nonrefundable tax credit known as the Saver's Credit may be available to low and middle-income savers who make contributions to eligible retirement savings plans? Explore the Saver's Credit to learn more.

ActionPretaxPost-tax Roth (if available)
ContributionsMade before state and federal tax withholdingMade after state and federal tax withholding, See Roth 457 Summary for more information.
Immediate benefitLower taxable income for the yearNone
Earnings (if any)Grow tax-deferredGrow tax-free
DistributionsTaxable as ordinary incomeTax-free if qualified

Qualified Roth Distribution

Roth 457 earnings are tax-free if the Roth participant meets all 3 of these requirements.

  1. A distributable event has occurred
  2. Roth account is held 5+ years, and
  3. The participant is age 59ยฝ or older, disabled, or deceased.

If one or more of these requirements are not met, it is considered a non-qualified Roth distribution and subject to taxation on the earnings portion of the distributed amount.

Roth contributions were invested after taxes were withheld so distributions of Roth contributions are tax-free.